IDEAS home Printed from https://ideas.repec.org/a/taf/defpea/v15y2004i1p27-38.html
   My bibliography  Save this article

Arms race and economic growth

Author

Listed:
  • Toshihiro Ihori *

Abstract

This paper investigates the dynamic implications of an arms race between two rival countries. By incorporating defence spending into the conventional overlapping generations growth model, this paper explores long-run consequences for national security and economic growth. The security spending-GDP ratio increases with economic growth if defence technology has a fixed benefit. Although the steady-state defence spending is too much in terms of the static efficiency (or compared with private consumption), it may be too little if private saving is too little in terms of the dynamic efficiency. We also explore the unstable nature of an arms race when defence technology needs a fixed cost in the cases of "open war" and "closed war", or it is efficient and the initial capital stock is low in the case of "open war". In such cases, both countries could not grow in the long-run due to the arms race effect.

Suggested Citation

  • Toshihiro Ihori *, 2004. "Arms race and economic growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(1), pages 27-38, February.
    • Handle: RePEc:taf:defpea:v:15:y:2004:i:1:p:27-38
    DOI: 10.1080/1024269042000164478
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1024269042000164478
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1024269042000164478?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Bergstrom, Theodore & Blume, Lawrence & Varian, Hal, 1986. "On the private provision of public goods," Journal of Public Economics, Elsevier, vol. 29(1), pages 25-49, February.
    2. Boadway, Robin & Pestieau, Pierre & Wildasin, David, 1989. "Tax-transfer policies and the voluntary provision of public goods," Journal of Public Economics, Elsevier, vol. 39(2), pages 157-176, July.
    3. Keith Hartley & Todd Sandler, 2001. "Economics of Alliances: The Lessons for Collective Action," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 869-896, September.
    4. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Keisuke Hattori, 2015. "Within-group cooperation and between-group externalities in the provision of public goods," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(2), pages 252-273, April.
    2. Joanne Evans & Eleftherios Goulas & Paul Levine, 2007. "Military Expenditure And Migration In Europe," Defence and Peace Economics, Taylor & Francis Journals, vol. 18(4), pages 305-316.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andreas Löschel & Dirk Rübbelke, 2014. "On the Voluntary Provision of International Public Goods," Economica, London School of Economics and Political Science, vol. 81(322), pages 195-204, April.
    2. Jochimsen, Beate, 2019. "Christmas lights in Berlin: New empirical evidence for the private provision of a public good," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 19-04, University of Cologne, FiFo Institute for Public Economics.
    3. Bandyopadhyay, Subhayu & Sandler, Todd, 2021. "Counterterrorism policy: Spillovers, regime solidity, and corner solutions," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 811-827.
    4. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2011. "Matching as a Cure for Underprovision of Voluntary Public Good Supply: Analysis and an Example," ANU Working Papers in Economics and Econometrics 2011-541, Australian National University, College of Business and Economics, School of Economics.
    5. Wolfgang Buchholz & Richard Cornes & Dirk T. G. Rübbelke, 2009. "Existence and Warr Neutrality for Matching Equilibria in a Public Good Economy: An Aggregative Game Approach," CESifo Working Paper Series 2884, CESifo.
    6. Bayer, Péter & Herings, P. Jean-Jacques & Peeters, Ronald, 2021. "Farsighted manipulation and exploitation in networks," Journal of Economic Theory, Elsevier, vol. 196(C).
    7. Rupayan Gupta, 2014. "Changing threat perceptions and the efficient provisioning of international security," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1312-1341, November.
    8. Cremer, Helmuth & Marchand, Maurice & Pestieau, Pierre, 1997. "Investment in local public services: Nash equilibrium and social optimum," Journal of Public Economics, Elsevier, vol. 65(1), pages 23-35, July.
    9. Buchholz, Wolfgang & Nett, Lorenz & Peters, Wolfgang, 1998. "The strategic advantage of being less skilled," Economics Letters, Elsevier, vol. 60(1), pages 35-39, July.
    10. Wolfgang Buchholz & Richard Cornes & Dirk Rübbelke, 2014. "Potentially Harmful International Cooperation on Global Public Good Provision," Economica, London School of Economics and Political Science, vol. 81(322), pages 205-223, April.
    11. Toshihiro Ihori, 2000. "Defense Expenditures and Allied Cooperation," Journal of Conflict Resolution, Peace Science Society (International), vol. 44(6), pages 854-867, December.
    12. Vítor Gaspar, 2010. "Financial Stability and Policy Cooperation," Working Papers o201001, Banco de Portugal, Economics and Research Department.
    13. Kirchsteiger, Georg & Puppe, Clemens, 1997. "On the possibility of efficient private provision of public goods through government subsidies," Journal of Public Economics, Elsevier, vol. 66(3), pages 489-504, December.
    14. Ghislain Dutheil de la Rochère & Jean-Michel Josselin & Yvon Rocaboy, 2011. "The role of aggregation technologies in the provision of supranational public goods: A reconsideration of NATO’s strategies," The Review of International Organizations, Springer, vol. 6(1), pages 85-103, March.
    15. Barham, Vicky & Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1997. "Volunteer work and club size: Nash equilibrium and optimality," Journal of Public Economics, Elsevier, vol. 65(1), pages 9-22, July.
    16. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    17. Josef Falkinger, 2004. "Noncooperative Support of Public Norm Enforcement in Large Societies," CESifo Working Paper Series 1368, CESifo.
    18. Konrad, Kai A., 1998. "Local public goods and central charities," Regional Science and Urban Economics, Elsevier, vol. 28(3), pages 345-362, May.
    19. Karen Pittel & Dirk T.G. Rübbelke, 2006. "Private provision of public goods: incentives for donations," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 33(6), pages 497-519, November.
    20. Tamai, Toshiki, 2010. "Public goods provision, redistributive taxation, and wealth accumulation," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 1067-1072, December.

    More about this item

    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:taf:defpea:v:15:y:2004:i:1:p:27-38. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/GDPE20 .

    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.