The study said that political tensions are already high in the Middle East region and have resulted in higher oil prices and economic uncertainty.
In addition to the possible casualties and humanitarian crisis if a war erupted against Iraq, "The major global economic impact of military action in Western Asia would arise primarily as a result of its effects on the supply and price of oil, on consumer and business confidence worldwide and on macroeconomic policies," the study said.
It said the effects on the economy in case of a war will depend on the scale and duration of the conflict.
But an oil crisis lasting more than six months would have a "global recessionary effect, not only through welfare losses, but also through further erosion of consumer and business confidence".
It said that oil-exporting countries may initially gain from higher oil prices, but experience has shown that those countries cannot sustain the gain because of a slowdown in the world economy as a direct consequence of persistent high oil prices.
"The possibility of military action in Western Asia is already having a negative effect on the world economy," the study said. "Its realization would be a further brake on global economic growth, in particular on development in Western Asia."
In terms of casualties, the World Health Organization had predicted that as many as 500,000 Iraqis would need immediate medical treatment from injuries suffered in a war.
The U.N. High Commissioner for Refugees predicted that as many as 900,000 Iraqis would flee the country, and hundreds of thousands more would be internally displaced. The agency has asked governments to provide 37 million dollars toward a contingency plan for a humanitarian crisis in the region.
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