Trade Costs, Conflicts, and Defense Spending

Arbeitspapier

This paper develops a quantitative model of trade, military conflicts, and defense spending. Trade liberalization between two countries reduces probability of an armed conict between them, causing both to cut defense spending. This in turn causes a domino effect on defense spending by other countries. As a result, both countries and the rest of the world are better off. We estimate the model using data on trade, conflicts, and military spending. We find that, after reduction of costs of trade between a pair of hostile countries, the welfare effect of worldwide defense spending cuts is comparable in magnitude to the direct welfare gains from trade.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Munich Discussion Paper ; No. 2013-11

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Trade Policy; International Trade Organizations ; International Conflicts; Negotiations; Sanctions ; National Security and War
• Thema: general equilibrium ; gains from trade ; defense spending

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Seitz, Michael ; Tarasov, Alexander ; Zakharenko, Roman
• Ereignis: Veröffentlichung
• (wer): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (wo): München
• (wann): 2013

Weitere Informationen

• DOI: doi:10.5282/ubm/epub.15733
• Handle: http://hdl.handle.net/10419/104406
• URN: urn:nbn:de:bvb:19-epub-15733-1
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ