A random walk down the road to war: War cycles, prices and causality†

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Abstract
Many scholars believe that war and the economy move in a regular, connected cyclical pattern over time. Using data on war and prices for a 481 year period, spectral analysis produced no evidence for such cycles. Both series are stationary when differenced once: war is a random walk and prices are a simple moving average. Causality was examined with an error correction representation of the Granger test for causality. Though there are ambiguous indications that the two series might be cointegrated, the evidence for causality between them is weak. Since there is a permanent level of war in the great power system, the lack of strong causality from war to prices was to be expected.