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Estimating the Economic Benefits of Forward-Engaged Naval Forces

Author

Listed:
  • Robert E. Looney

    (Department of National Security Affairs, Naval Postgraduate School, Monterey, California 93943-5219)

  • David A. Schrady

    (Department of Operations Research, Naval Postgraduate School)

  • Ronald L. Brown

    (Joint National Test Facility, Schriever Air Force Base, Colorado 80912-7300)

Abstract

In preparing for the 1997 quadrennial defense review, US Navy leaders asked us if we could quantify the economic benefits of forward-engaged naval forces and communicate them to policy makers. Until this point, the only evidence of such benefits was anecdotal. Forward-engaged naval forces are US-based ships deployed to such areas as the Mediterranean Sea, the Persian Gulf, or the western Pacific Ocean. Forward engagement affords the opportunity to work with regional states in shaping the international security environment and also enables rapid response to unexpected crises. Using a methodology based on oil-futures prices, we estimated the economic benefits of crisis response by forward-engaged naval forces for the 1990 Iraqi invasion of Kuwait. We showed that the economic benefits to the United States and its trading partners are conservatively in the tens of billions of dollars.

Suggested Citation

  • Robert E. Looney & David A. Schrady & Ronald L. Brown, 2001. "Estimating the Economic Benefits of Forward-Engaged Naval Forces," Interfaces, INFORMS, vol. 31(4), pages 74-86, August.
    • Handle: RePEc:inm:orinte:v:31:y:2001:i:4:p:74-86
    DOI: 10.1287/inte.31.4.74.9671
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    References listed on IDEAS

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    1. Bopp, Anthony E. & Lady, George M., 1991. "A comparison of petroleum futures versus spot prices as predictors of prices in the future," Energy Economics, Elsevier, vol. 13(4), pages 274-282, October.
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