IDEAS home Printed from https://ideas.repec.org/a/epc/journl/v6y2011i2p34-40.html
   My bibliography  Save this article

The deadweight cost of war: An illustrative CGE

Author

Listed:
  • John Gilbert

    (Utah State University, Logan, UT, USA)

  • Tanigawa Takahiko

    (Faculty of Economics, Saitama University, Japan)

  • Krit Linananda

    (Chulalongkorn University, Bangkok, Thailand)

  • Edward Tower

    (Department of Economics, Duke University, Durham, NC, USA)

  • Alongkorn Tuncharoenlarp

    (Chulalongkorn University, Bangkok, Thailand)

Abstract

War is costly both because of the resources used up and because of the inefficiency introduced by the higher taxes necessary to finance them. War has been justified by its ability to help an economy achieve full employment. Robert Barro argues that war increases employment because folks work harder to smooth consumption and take advantage of the higher interest rates caused by the scarcity that accompanies war. In his view, it does not reflect putting previously wasted resources to work. This article describes the simulations of a small-scale intertemporal computable general equilibrium model. It illustrates that the cost of war depends on how it is financed, and that the increase in employment that it generates may be explained by the logic that Barro offers. Our model can be loaded into GAMS, a program which is available free of charge online, so readers can themselves simulate variations of the model.

Suggested Citation

  • John Gilbert & Tanigawa Takahiko & Krit Linananda & Edward Tower & Alongkorn Tuncharoenlarp, 2011. "The deadweight cost of war: An illustrative CGE," Economics of Peace and Security Journal, EPS Publishing, vol. 6(2), pages 34-40, July.
    • Handle: RePEc:epc:journl:v:6:y:2011:i:2:p:34-40
    as

    Download full text from publisher

    File URL: http://www.epsjournal.org.uk/index.php/EPSJ/article/view/129
    Download Restriction: Open access 24 months after original publication.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    War; peace; marginal welfare cost of tax collection;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:epc:journl:v:6:y:2011:i:2:p:34-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael Brown, Managing Editor, EPSJ (email available below). General contact details of provider: https://edirc.repec.org/data/ecaarea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.