Defense Expenditure and Economic Growth under External Predation
AbstractThis paper develops a growth model of a country under a Hobbesian environment with international conflicts where national defense is the only way to prevent external predation. The long run growth path is determined by the equilibrium of a dynamic game with three players, the external predator, the government and the family. The equilibrium growth path has three phases, submissive equilibrium, tolerant equilibrium and full-protected equilibrium. Different defense strategies result in different growth prospects and sustainable growth will endogenously induce adjustment of defense strategies.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29286.
Date of creation: 07 Jan 2011
Date of revision:
economic growth; predate; defense expenditure;
Find related papers by JEL classification:
- F51 - International Economics - - International Relations and International Political Economy - - - International Conflicts; Negotiations; Sanctions
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
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