Citation

Medina V, Nidier CD. Def. Peace Econ. 2003; 14(6): 425-435.

Copyright

(Copyright © 2003, Informa - Taylor and Francis Group)

DOI

10.1080/1024269032000085198

PMID

unavailable

Abstract

The aim of this paper is to provide insights on war spending using simple tools of financial calculus rather than developing a general theory. Combining Grossman and Han's theory of war finance with the empirical literature that displays a straightforward relationship between the real value of money and wartime military events, we advocate the use of the real option approach of war spending. Some calculations and an empirical example illustrate this approach.

The opinions expressed in this paper are those of the authors and do not reflect those of the French Ministry of Defence.