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The Rise of a Superpower: Endogenous Asymmetry in a Symmetric Mean Field Game of Militarization and Capital Accumulation

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  • Heng-fu Zou

Abstract

This paper develops a dynamic mean field game model in which a superpower emerges endogenously from stochastic regime shifts in capital productivity and military effectiveness. Starting from a symmetric population, countries accumulate capital and arms under strategic external ities. Rare transitions into high-productivity regimes generate sustained divergence, concentrating power in a single dominant actor. We derive the coupled Hamilton-Jacobi-Bellman and Fokker-Planck equations, simulate closed-form solutions, and illustrate how asymmetry arises without exogenous advantage. The framework provides a tractable foundation for analyzing unipolarity, arms races, and welfare divergence in decentralized strategic environments.

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  • Heng-fu Zou, 2025. "The Rise of a Superpower: Endogenous Asymmetry in a Symmetric Mean Field Game of Militarization and Capital Accumulation," CEMA Working Papers 762, China Economics and Management Academy, Central University of Finance and Economics.
    • Handle: RePEc:cuf:wpaper:762
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    References listed on IDEAS

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    1. Heng-Fu Zou, 1997. "Dynamic analysis in the Viner model of mercantilism," Journal of International Money and Finance, Elsevier, vol. 16(4), pages 637-651, August.
    2. Gong, Liutang & Zou, Heng-fu, 2003. "Military spending and stochastic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 28(1), pages 153-170, October.
    3. Zou, Heng-fu, 1995. "A dynamic model of capital and arms accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 371-393.
    4. Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(1), pages 169-203, January.
    5. Keith Hartley & Todd Sandler (ed.), 1995. "Handbook of Defense Economics," Handbook of Defense Economics, Elsevier, edition 1, volume 1, number 1.
    6. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(3), pages 379-414, July.
    7. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, Enero-Abr.
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    Keywords

    Mean Field Games; Superpower Emergence; Militarization; Capital Accumulation; Strategic Externalities; Regime Switching;
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