The fiscal role of conscription in the US World War II effort
I consider the role of conscription as a fiscal shock absorber in times of war. Conscription of military personnel allows the fiscal authority to minimize wartime government expenditure, and hence, minimize tax distortions associated with war finance. I develop a simple dynamic general equilibrium model to articulate this view, and calibrate the model to mimic the U.S. World War II experience. Analysis of the calibrated model indicates that the value of conscription as a fiscal policy tool is quantitatively large.
Year of publication: |
2006-04-26
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Authors: | Siu, Henry E. |
Institutions: | Vancouver School of Economics |
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