RAMSEY IN DUAL-POPULATION LANDS: INTERNAL CONFLICT AND UTILITY-MAXIMIZING CONSUMPTION

Amnon Levy and Joao Faria

Defence and Peace Economics, 2007, vol. 18, issue 4, 339-352

Abstract: Ramsey's model is extended to three possible scenarios of conflicts in dual-population lands: partition, federation and civil war. The federally utility-maximizing consumption-growth rate in a strictly political federation might be lower than that under partition for the wealthier and more slowly multiplying group. This group may benefit from joining a federation that facilitates technological transfer and from obeying the federal no-arbitrage rule as long as its own technology is inferior to the hybrid. The utility-maximizing consumption growth rate for a group engaged in a civil war is larger than those under partition and a strictly political federation if its rival's warfare is mainly aimed at inflicting casualties and is likely to be smaller when its rival's warfare is mainly sabotage.

Keywords: Internal conflict; Partition; Federation; Civil war; Utility-maximizing consumption (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1080/10242690600951698

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