Defense Expenditure and Economic Growth under External Predation

Taoxiong Liu, An-Gang Hu and Bi-Hua Zhou

MPRA Paper from University Library of Munich, Germany

Abstract: This paper develops a growth model of a country under a Hobbesian environment with international conflicts where national defense is the only way to prevent external predation. The long run growth path is determined by the equilibrium of a dynamic game with three players, the external predator, the government and the family. The equilibrium growth path has three phases, submissive equilibrium, tolerant equilibrium and full-protected equilibrium. Different defense strategies result in different growth prospects and sustainable growth will endogenously induce adjustment of defense strategies.

Keywords: economic growth; predate; defense expenditure (search for similar items in EconPapers)
JEL-codes: E60 F51 (search for similar items in EconPapers)
Date: 2011-01-07
New Economics Papers: this item is included in nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:29286

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