This paper sets up a small open stochastic endogenous growth model to analyze the impact of foreign military threats on the home long-run economic growth rate and welfare. We prove that, in addition to the intertemporal substitution elasticity in consumption, whether the home country is a net...

This paper examines the stability of arms races in the Third World countries and assumes that the utility function is separable between the consumption and the weapon stocks. We find that the military expenditures and the weapon stocks will exhibit stability and overshooting takes place for the...

Using the assumption that the vertical multinationals ship capital and intermediate goods from parent in Taiwan to subsidiaries in less-developed countries, this paper extends the Harris-Todaro model to analyze the impacts of globalization on wage inequality and unemployment. We find that an...

We observe that the period between Cold War era and the event of 911, variation in foreign military threats leads to variation in defense resources and fluctuations in the labor market. Using an intertemporal optimization dynamic model, this paper explores the impacts of foreign military threats...