Pricing war within a real option framework
The aim of this paper is to provide insights on war spending using simple tools of financial calculus rather than developing a general theory. Combining Grossman and Han's theory of war finance with the empirical literature that displays a straightforward relationship between the real value of money and wartime military events, we advocate the use of the real option approach of war spending. Some calculations and an empirical example illustrate this approach.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 14 (2003)
Issue (Month): 6 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/GDPE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GDPE20|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas J. Sargent & Neil Wallace, 1981. "Some unpleasant monetarist arithmetic," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Willard, Kristen L & Guinnane, Timothy W & Rosen, Harvey S, 1996.
"Turning Points in the Civil War: Views from the Greenback Market,"
American Economic Review,
American Economic Association, vol. 86(4), pages 1001-18, September.
- Kristen L. Willard & Timothy W. Guinnane & Harvey S. Rosen, 1995. "Turning Points in the Civil War: Views from the Greenback Market," NBER Working Papers 5381, National Bureau of Economic Research, Inc.
- Calomiris, Charles W, 1994.
"Price and Exchange Rate Determination during the Greenback Suspension,"
Oxford Economic Papers,
Oxford University Press, vol. 46(2), pages 344, April.
- Calomiris, Charles W, 1988. "Price and Exchange Rate Determination during the Greenback Suspension," Oxford Economic Papers, Oxford University Press, vol. 40(4), pages 719-50, December.
- Brown, William O. & Burdekin, Richard C. K., 2000.
"Turning Points in the U.S. Civil War: A British Perspective,"
The Journal of Economic History,
Cambridge University Press, vol. 60(01), pages 216-231, March.
- William O. Brown, Jr. & Richard C.K. Burdekin, . "Turning Points in the U.S. Civil War: A British Perspective," Claremont Colleges Working Papers 1999-29, Claremont Colleges.
- Bruno S. Frey & Marcel Kucher, 1999. "Wars and Markets: How Bond Values Reflect World War II," CESifo Working Paper Series 221, CESifo Group Munich.
- Herschel I. Grossman & Taejoon Han, 1991. "A Theory of War Finance," NBER Working Papers 3799, National Bureau of Economic Research, Inc.
- Grossman, Herschel I & Han, Taejoon, 1996. "War Debt, Moral Hazard, and the Financing of the Confederacy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(2), pages 200-215, May.
- Jack Hirshleifer, 1995. "Theorizing About Conflict," UCLA Economics Working Papers 727, UCLA Department of Economics.
- Richard C.K. Burdekin & Marc D. Weidenmier, . "The Option Value of Confederate Currency and Inflation Control, 1861-1865," Claremont Colleges Working Papers 2000-29, Claremont Colleges.
- Hall, George J., 2004.
"Exchange rates and casualties during the first world war,"
Journal of Monetary Economics,
Elsevier, vol. 51(8), pages 1711-1742, November.
- George J. Hall, 2002. "Exchange Rates and Casualties During the First World War," NBER Working Papers 9261, National Bureau of Economic Research, Inc.
- George J. Hall, 2001. "Exchange Rates and Casualties During the First World War," Cowles Foundation Discussion Papers 1321, Cowles Foundation for Research in Economics, Yale University.
- Rockoff, Hugh, 1998. "The Peace Dividend in Historical Perspective," American Economic Review, American Economic Association, vol. 88(2), pages 46-50, May.
- Hirshleifer, Jack, 1995. "Theorizing about conflict," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 7, pages 165-189 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:taf:defpea:v:14:y:2003:i:6:p:425-435. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.