Estimating defence budget saving from disarmament: the United States’ case |
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Authors: | Minoru Okamura ? |
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Institution: | School of International Politics , Economics and Business, Aoyama Gakuin University , 4‐4‐25 Shibuya, Shibuya‐ku , Tokyo 150 , Japan |
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Abstract: | Probing the technology in the production of US national defence by using a dynamic cost‐function model with adjustment costs, this paper evaluates the effect of reducing the level of national defence on the defence budget saving. Our inquiry involves estimating the defence production structure without output data for non‐market goods that are normally unavailable. Our findings include: (i) the United States behaves rationally to minimize cost in the production of national defence; (ii) the adjustment costs are larger in disarmament than in military build‐up; (iii) due to the adjustment costs peculiar to disarmament, the defence budget saving from disarmament appears small, but cutbacks allow great savings on the defence budget. |
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Keywords: | Disarmament Defence production function Dynamic cost‐function model Non‐market goods Technical change Defence budget savings JEL codes: D24 H56 H61 |
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