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This paper contributes to the research on the macroeconomic origins of conflict. Based on a sample of 133 lowand middle-income countries over a 30-year period, it analyses to what extent changes in a country’s commodity terms-of-trade (ToT) can explain an increase in the incidence and intensity of conflicts through their effect on aggregate income. While the evidence from previous studies on the link between macroeconomic conditions and conflict is rather inconclusive, we find a significant relationship. Our baseline model finds that a negative commodity ToT shock leads to an increase in the number of conflict events and fatalities in our sample. Moreover, the effect plays out over several years albeit with decreasing strength after the second year; and its magnitude is twice as large for Low-Income Countries and Fragile and Conflict-affected States when compared with the sample average. In addition, our results show that macroeconomic shocks are creating more violence in countries with higher inequality and in cases where fiscal policy faces relatively stronger constraints on financing a response to the initial shock to incomes. Our results are robust to a number of plausible variations in model specification. The paper’s results, in conjunction with previous studies that emphasize the economic cost of conflicts, suggest the presence of a fragility trap—a vicious cycle of worsening economic conditions and deteriorating conflicts. Effective policies and well-tailored external financial support could be expected to help countries address the challenge.

Since the 2000s, many pundits and scholars have attributed two rising powers’ instances of aggression to their domestic problems. Russia’s invasion of Ukraine and annexation of Crimea and its deployment of troops to Syria, along with China’s assertive actions in the South China Sea, have been seen as aggressions arising out of domestic weakness (Kaplan, 2016). Some have attributed China’s recent provocative actions against India, Japan, and Taiwan to its struggling economy in the wake of the pandemic (Myers, 2020). In the post-Cold War period, these two great powers, often regarded as revisionist powers, have regained their national capabilities to some extent and have sought higher status in international politics (Larson & Shevchenko, 2010). What made them more aggressive in the 2010s? One promising explanation is their decreasing economic growth rates. Due to their abundance of natural and human resources, the two former communist countries had maintained their increased status relative to their neighboring states since the 2000s or even earlier. However, falling energy prices and the reform-incapable structures of their economies retarded[slowed] their further growth and increased the burden on their authoritarian leaders, who also had to manage domestic calls for political freedom and maintain the legitimacy of their rule. According to this article’s causal explanation, Russia and China became more revisionist actors in the 2010s at least partly because their economies went downhill, and their aggressions were directed at smaller and more vulnerable economies.

A slowing economy and economic dependence have both individual and interactive effects on military conflict in international politics. Slow growth rates contribute positively to conflict initiation, especially when an autocracy suffering from a slowing economy targets a democracy whose economy is dependent on the autocracy. Whereas economic interdependence has been regarded by many liberal scholars as a reason for international cooperation, this study shows why and how asymmetric interdependence contributes to interstate conflict by articulating its interaction with an economic slowdown in a dyadic relationship. Both political unrest and economic problems have destabilizing effects on international politics, but their effects differ when economically dependent democracies are the target. Future research should compare different types of domestic unrest and their effects on international relations with sophisticated logic and strong evidence.

Economic recovery efforts since the 2008-2009 global financial crisis have mainly depended on unconventional monetary policies. As fears rise of yet another international financial crisis, there are growing concerns about the increased possibility of large-scale military conflict.

More worryingly, in the current political landscape, prolonged economic crisis, combined with rising economic inequality, chauvinistic ethno-populism as well as aggressive jingoist rhetoric, including threats, could easily spin out of control and ‘morph’ into military conflict, and worse, world war.

If the economy is a mountain climber on a ridge, “there are times when that ridge is extremely broad and even a major event isn’t going to knock the economy off the ridge,” said Glenn Kelman, chief executive of real-estate brokerage Redfin.

Now, “it feels like the ridge has gotten much narrower,” he said.

The US economy appears to be doing well, according to an IPC economic outlook report. In fact, by the end of 2023, unemployment dropped to 3.8%, and inflation continued to decrease. The markets appear to have stabilized.

But that’s not the whole story.

Fluctuating inflation—or price gouging, which is just as relevant—reduces purchasing power for the everyday American. It devalues portfolio value and reduces overall spending. Less spending results in a stagnant economy, leading to fewer jobs and more economic unrest.

While this may not cause collapse, it may lead to other tipping points.

Under elevated trend inflation, the frictions discussed previously pose potential consequences through multiple mechanisms. In this section, we discuss three of them: loss of purchasing power, capital misallocation and investment distortions, and the slope of the Phillips curve.

Loss of purchasing power. In the above discussion of wage stickiness, the purchasing power of wages erodes when frictions prevent them from adjusting at the same rate as rising prices.5 Individuals with sticky wages consume fewer goods and services as the general level of prices rises, a situation which reflects a direct loss to financial well-being. This loss is amplified when considering a subsequent drop in aggregate demand. As some individuals lower their spending, the would-be recipients of the forgone spending have a lower income, and they, in turn, reduce their spending. This pattern of reduced consumption ripples through the economy, producing an aggregate decline in welfare.

WONG: First, the argument in favor of killing the bear - inflation is terrible for an economy. It makes people on fixed incomes poorer, and it makes it really hard for businesses and people to know how to invest because everything's so uncertain. Also, when inflation is high, it gets into people's psyches. And central bankers worry a lot about this.

WOODS: But Alex says central bankers, like Jerome Powell, are underplaying just how much pain there will be, like polar bear life-threatening levels of pain. And that's because there is another cause of the inflation today, the pandemic.

Third-Party Service Providers Are Objecting to the Remedies in Schedule A Cases

Courts are not alone in pushing back on these cases. As discussed above, plaintiffs generally seek an order directed to third-party domain name providers requiring they disable defendants' webpages and for e-commerce platforms to freeze defendants' assets. This is critical to plaintiffs' recovery because, without appearing, plaintiffs can never discover the identity of the defendants. Thus, plaintiffs only recovery comes from the seizure of assets frozen in connection with the TRO/PI. Though some courts express concern with asset freezes so early in a case, they have generally complied with plaintiffs' requests.

SAD scheme suits refer to Schedule A Defendants, meaning large numbers of defendants sued as a group because their specific identities could not be established

Mass counterfeiting cases developed as a reaction to the Tiffany ruling, as a way to potentially reach the entities responsible for infringing listings, and mass counterfeiting litigation has proliferated during the past ten years. 337 Mass counterfeiting cases allege trademark counterfeiting against a large number of defendants who are typically listed on an attached "Schedule A." 338 Schedule A, and therefore the identity of the defendants, may be held under seal for at least part of the case's pendency. In some instances, the plaintiffs themselves remain anonymous for some amount of time.339 The defendants are usually websites, Paypal accounts, store I.D. numbers, and other aliases and anonymous entities; in many cases, their identities overlap to an extent that may be difficult to determine 340 Often the individuals responsible for these websites and accounts are located in another country, but they are subject to personal jurisdiction in the filing district because they target the U.S. as a market for their counterfeit products. 34

Too Many Defense Factors Makes the Defenses Unwinnable. More generally, to avoid the new cause of action, online marketplaces must win each and every one of the 13 preconditions (many of which have subparts). In other words, they must do everything perfectly AND prove all 13 elements to the court’s satisfaction. Safe harbors with that many prerequisites are extraordinarily costly because the plaintiffs can contest each element and engage in expensive discovery related to them. The DMCA online safe harbor has functionally failed for this reason; it’s too expensive for startups to prove they qualify, and copyright owners can weaponize those costs intentionally to drive entities out of the industry. This has turned the DMCA online safe harbor into a sport of kings; so only larger companies can afford it, which has exacerbated the concerns about “Big Tech” market consolidation. The SHOP SAFE Act replicates the structure that failed in the DMCA online safe harbor, so it’s predictable that the SHOP SAFE defenses also will fail to help out online marketplaces, leaving them highly vulnerable to the new cause of action.

The SHOP SAFE Act had a laudable goal (to reduce or eradicate the use of counterfeit marks in connection with the sale and distribution of goods that implicate health and safety on e-commerce platforms), but the Act simply went too far. Rather than addressing the real question-the level of knowledge required for any third party accused of contributory infringement-SHOP SAFE was limited to e-commerce platforms, and it attempted to impose on the platform the burden of demonstrating that it took twelve separate steps to verify the identity of the listing party and the authenticity of marks used in connection with the sale of goods, in order to avoid liability. The processes to be implemented were not gauged to any perceived risk that the items offered for sale might be counterfeit or could potentially cause a level of harm to purchasers or end users. Further, many of the terms in the act were ill-defined, and there was much ambiguity about precisely what was required from the ecommerce platforms in order for them to avoid contributory liability. For example, the proposed act required "reasonable proactive technological measures for screening goods before displaying the goods to the public" in order to prevent use of a counterfeit mark,416 but it was unclear whether this was intended to require screening of the actual goods themselves, images depicting the goods, descriptions of the goods, or something else entirely. "Reasonable technological measures for screening third-party sellers" were also required, in order to ensure that terminated sellers do not later rejoin the platform under an alias,417 but again no further details were provided.

Too Many Defense Factors Makes the Defenses Unwinnable. More generally, to avoid the new cause of action, online marketplaces must win each and every one of the 13 preconditions (many of which have subparts). In other words, they must do everything perfectly AND prove all 13 elements to the court’s satisfaction. Safe harbors with that many prerequisites are extraordinarily costly because the plaintiffs can contest each element and engage in expensive discovery related to them. The DMCA online safe harbor has functionally failed for this reason; it’s too expensive for startups to prove they qualify, and copyright owners can weaponize those costs intentionally to drive entities out of the industry. This has turned the DMCA online safe harbor into a sport of kings; so only larger companies can afford it, which has exacerbated the concerns about “Big Tech” market consolidation. The SHOP SAFE Act replicates the structure that failed in the DMCA online safe harbor, so it’s predictable that the SHOP SAFE defenses also will fail to help out online marketplaces, leaving them highly vulnerable to the new cause of action.

Facilitates Robust E-commerce: This Act provides a safe harbor from contributory infringement for those platforms that follow the best practices set out in the statute to keep sellers of counterfeit products off their platforms. Because the steps are reasonable, and the benefit to the platforms significant—shielding from contributory trademark infringement liability—the statute does not create unworkable barriers to continued robust e-commerce. The Act supports new market entrants by exempting platforms that have not reached a certain level of sales, unless counterfeiting becomes prevalent on the platform. The Act is limited in application to goods that have a health or safety impact, goods that when counterfeited have the most potential for consumer harm.

SECTION-BY-SECTION

The SHOP SAFE Act seeks to curb harmful counterfeit items sold through online marketplaces. That’s a laudable goal that I expect everyone supports. However, this bill is itself a giant counterfeit. It claims to focus on “counterfeits” that could harm consumer “health and safety,” but those are both lies designed to make the bill seem narrower and more balanced than it actually is.

Instead of protecting consumers, this bill gives trademark owners absolute control over online marketplaces by overturning Tiffany v. eBay. It creates a new statutory species of contributory trademark liability that applies to online marketplaces (defined more broadly than you think) selling third-party items that bear counterfeit marks and implicate “health and safety” (defined more broadly than you think), unless the online marketplace operator does the impossible and successfully navigates over a dozen onerous and expensive compliance obligations.

In the context of platforms, many scholars and commentators have raised the question of whether there is a hierarchical distinction between the "platform owner" and the entrepreneurs and contractors that facilitate this economy.' 52 The same question, we argue, might also be posed in the trademark arena, that is, whether our system of contributory liability, as well intended as it might be, facilitates the formation of an unequal system that extends the benefits of trademark protection and enforcement to a few, but radically undervalues the contributions of the mini entrepreneurs that characterize platform vitality. The absence of statutory safe harbors in the trademark context often has a particularly deleterious effect on smaller ISPs and related platforms, who may face different challenges based on their limited legal resources. 15 3 Many smaller ISPs do not have automated systems to respond to 512 notices, and therefore an attention to the diversity of ISP platforms is especially critical in considering how to design better systems of notification and enforcement. 154

Country of Origin Problems. The mandatory reporting of products’ country of origin is a liability trap. The bill excludes the smallest sellers from making this disclosure, but plenty of small-scale sellers will be obligated nonetheless, and they (and even bigger players) are sure to botch this because the law is confusing and the information won’t always be available to resellers. Any error on country-of-origin disclosures sets up the third-party sellers for false advertising claims. (Per Malwarebytes, the online marketplace should qualify for Section 230 protection for the Lanham Act false advertising claims). This gives trademark owners a second way of targeting third-party sellers; even if those sellers aren’t engaging in counterfeiting or any trademark infringement at all, country-of-origin false advertising claims can still be weaponized to drive them out of the marketplace.

Another proposal also suggests importing much of the DMCA into the scheme for contributory trademark liability for Online Marketplaces.134 This proposal alters the notice and takedown requirement and suggests a notice and notice requirement wherein the service provider would forward the infringement claims to the proposed infringer.135 This would reduce some of the anticompetitive effects that can come from abuse of notice and takedown procedures.136 The proposal also highlights that because it is often more difficult to discern whether trademark infringement has occurred in a listing, having a notice and notice scheme allows the potential infringer to defend themselves and resolve the issue before experiencing the damaging effects from unwarranted takedowns.137

This proposal would have some benefits; however, the scheme is not a perfect match for its proposed goals and for ending online counterfeiting. A big reason for the notice and notice proposal is to prevent abuse that notice and takedown regimes can incentivize. Unfortunately, abusive notices can still occur, although it is more difficult. Parties receiving notices must respond to them, and bombarding parties with tons of notices can be expensive and difficult to respond to, especially if the notified party is a smaller business. A notice and notice scheme would grant prolific counterfeiters an opportunity to post alternative listings and create new profiles before their faulty listings are removed from the relevant platform.

For example, SHOP SAFE would not only require “electronic commerce platforms” to place burdensome new requirements on sellers, but it would also force covered businesses to permanently ban sellers who have had three counterfeit notices in one year with no clear mechanism for reinstatement. This is particularly problematic because many platforms have already seen that brands are abusing notice and takedown regimes to report products that are perfectly legitimate and are often sourced directly from the brands via outlets or clearance sales.

Under SHOP SAFE, there is no recourse for sellers or platforms who fall victim to fraudulent or abusive rights owners. As currently structured, SHOP SAFE will put legitimate sellers at risk of losing their livelihood. Once blacklisted with three reports there are no mechanisms for small sellers to remove themselves from SHOP SAFE’s reporting requirements — or for them to be reinstated given inflexible provisions — which are ironically more extensive for small sellers than for large sellers.

2. Repeat infringer policies are heavily service-dependent. Any 'repeat infringer' policies should be left flexible for each service to apply reasonably. Requiring termination of a third-party seller for "repeated use of a counterfeit mark," broadly defined as "three separate listings within one year," is onerous for businesses of all sizes, and draconian given the enormous volume of goods sold or offered for sale online. This provision could invite costly, time-consuming litigation or burdensome investigations over what is considered "mitigating circumstances" and decisions about whether to reinstate.

3. There are many other provisions in the bill that explicitly invite litigation over fact-intensive decisions, several times contemplating "any other factor considered relevant by a court". The provision on reinstating previously banned sellers includes a "verified decision" — how does a decision become verified? Another mentions "efforts the third-party seller takes to refute or resolve disputes once notified of a concern" — what constitutes "a concern" or its notification? How does one perform an "investigation" and how often must it be "periodically confirmed"?