On the Nature of Peace Economics

The purpose of this paper is to contribute to the definition of "peace economics." The core of peace economics has to be found in the distribution between productive and unproductive activities. In particular, such a distribution is shaped by the structure of the economy and the distinction between contested and uncontested activities. The positive "side" of peace economics emphasizes the study of conflict, which is interpreted as a strategic destructive interaction between rational agents. The normative "side" of peace economics is the study of economic policies intended to minimize the unproductive components within economies, thereby also reducing the risk of outbreak of actual conflicts. In this respect, peace economics can also contribute to the study of establishment of endogenous institutions, leading to a permanent peaceful development of societies.