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    The economics of the international arms trade

    Levine, P.L. and Somnath, S. and Smith, Ron P. (1993) The economics of the international arms trade. Discussion Paper. Centre for Economic Policy Research.

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    Abstract

    Sales of arms are a significant component of international trade and raise a range of pressing policy issues. After a short review of the market, this paper provides a formal model of the trade which allows for competing, forward-looking suppliers whose welfare depends on both the economic benefits from the sales and the security repercussions of recipient behaviour. The recipient's behaviour depends on their military capability which is a function of the stock of arms they have acquired. We first examine myopic recipients, whose behaviour depends on current stocks, then forward-looking recipients for whom questions of the time-consistency and the credibility of supplier threats to embargo, or promises to resupply become crucial. Finally, we examine the impact of supplier cooperation of the sort currently being discussed in the UN Security Council.

    Metadata

    Item Type: Monograph (Discussion Paper)
    Additional Information: CEPR Discussion Papers, number 770
    School: School of Business, Economics & Informatics > Economics, Mathematics and Statistics
    Depositing User: Sarah Hall
    Date Deposited: 27 Oct 2020 18:26
    Last Modified: 06 Dec 2021 10:17
    URI: https://eprints.bbk.ac.uk/id/eprint/41091

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