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Some Economic Effects of Unilateral and Multilateral Reductions in Military Expenditures in the major Industrialized and Developing Countries

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  • Haveman, J.D.
  • Deardorff, A.V.
  • Stern, R.M.

Abstract

We use the Michigan Model of World Trade and Production to assess the sectoral effects on the U.S. economy of: (1) a 25% unilateral reduction of military expenditures in the United States and (2) a 25% multilateral reduction of military expenditures in all of the major Western industrialized and developing countries included in the Michigan Model. Our principal findings suggest that the overall effects are not substantial. Although the sectoral results differ significantly depending on the alternative assumptions concerning compensating macroeconomic policies, less than 1.0% of the workforce might experience dislocation in all cases. The results of the multilateral reduction are qualitatively similar to those of a unilateral reduction.
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Suggested Citation

  • Haveman, J.D. & Deardorff, A.V. & Stern, R.M., 1991. "Some Economic Effects of Unilateral and Multilateral Reductions in Military Expenditures in the major Industrialized and Developing Countries," Working Papers 270, Research Seminar in International Economics, University of Michigan.
    • Handle: RePEc:mie:wpaper:270
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    References listed on IDEAS

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    1. Grobar, L.M. & Stern, R.M. & Deardorff, A.V., 1989. "The International Effects Of International Trade In Armaments In The Major Western Industrialized And Developing Countries," Working Papers 237, Research Seminar in International Economics, University of Michigan.
    2. Lisa Grobar & Robert Stern, 1989. "A data set on international trade in armaments for the major western industrialized and developing countries for 1980: Sources and methodological issues," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 125(4), pages 748-762, December.
    3. Robert M. Stern & Jonathan Francis & Bruce Schumacher, 1976. "Price Elasticities in International Trade," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-03137-5.
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    1. Jon Haveman & Alan Deardorff & Robert Stern, 1993. "Sectoral effects of reductions in NATO military expenditures in the major industrialized and developing countries," Open Economies Review, Springer, vol. 4(3), pages 247-268, September.
    2. Sotirios K. Bellos, 2017. "The Relationship between Military Expenditure and Certain Growth and Development Related Variables in Transition Economies: A Panel Data Analysis," Applied Economics and Finance, Redfame publishing, vol. 4(5), pages 31-44, September.
    3. Donald N. Baum, 1993. "The Economic Effects of Reduced Defense Expenditures: An Applied General Equilibrium Analysis," Conflict Management and Peace Science, Peace Science Society (International), vol. 12(2), pages 65-88, February.
    4. Alan K. Fox & Robert M. Stern, 1993. "Effects of Reductions in NATO Military Expenditures on US Employment by Sector/Occupation/Region," The World Economy, Wiley Blackwell, vol. 16(2), pages 193-211, March.
    5. Isard Walter & Anderton Charles H., 1999. "Survey of the Peace Economics Literature: Recent Key Contributions and a Comprehensive Coverage Up to 1992 (Part II)," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 5(4), pages 1-55, October.

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