The Macroeconomics of Dr. Strangelove.
This paper examines the weapons-accumulation decisions of two adversarial countries in the context of a deterrence/conflict initiation game embedded in an overlapping-generations model. The demographic structure permits analysis of both within- and between-country intergenerational externalities caused by past weapons-accumulation decisions, as well as of intragenerational externalities from the adversary's current weap ons accumulation. Zero accumulation is a possible equilibrium with both noncooperative and cooperative behavior. Countries may also accumula te weapons to the point where conflict initiation never occurs. Pareto-improving policies are generally available but international cooperation need not be Pareto-improving. Copyright 1993 by American Economic Association.
Year of publication: |
1993
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Authors: | John, A Andrew ; Pecchenino, Rowena A ; Schreft, Stacey L |
Published in: |
American Economic Review. - American Economic Association - AEA. - Vol. 83.1993, 1, p. 43-62
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Publisher: |
American Economic Association - AEA |
Saved in:
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