This thesis examines the effects of war on a state's economy. The Liberal Theory of international relations maintains that there are costs to war in terms of trade; in line with this argument, many researchers have suggested that trading partners are less likely to war with each other out of a fear of disrupting their trade, which would in turn disrupt their economies. Due to issues of elasticity and substitution, however, overall trade may not significantly decline during war. Additionally, there are known economic costs of war, such as debt. If war truly does have costs, then, it must be more in terms of costs to the national economy, rather than trade. This work examines the theory that war has costs to the economies of war initiators, and samples the economies of war initiators from the mid-nineteenth century to the late twentieth century. This paper uses a time series analysis and tests for anterior, concurrent, and posterior effects of war initiation on national economies, and uses a time period of up to twenty years before and after each war event. The results indicate that there are, in general, no negative effects of war on a state's economy: only one case had a significant negative result, while two had significant positive results; these two positive cases, however, also had strong evidence of autocorrelation. These results pose a challenge to the Liberal Theories of International Relations.