An Economic Model of the Wartime Economy: An Application to a Possible Sino-Japanese Conflict

Fudan Journal of Humanities and Social Sciences, 9(3):425-447, 2016

Posted: 12 Jan 2016 Last revised: 11 Aug 2016

See all articles by Mario Arturo Ruiz Estrada

Mario Arturo Ruiz Estrada

University of Malaya (UM) - Faculty of Economics & Administration (FEA)

Donghyun Park

Nanyang Technological University (NTU); Asian Development Bank

Jungsuk Kim

Sogang University - Institute of International and Area Studies

Date Written: January 10, 2016

Abstract

This paper introduces a new economic model of a wartime economy, the war economic capability model — WEC-Model. The WEC-Model assesses the economic impact of an armed conflict in three different stages: (1) initial armed conflict and diplomatic negotiations; (2) military armed conflict; and (3) winners and losers in the post-armed conflict stage. The analysis makes use of new indicators such as economic desgrowth (-d), armed conflict intensity (ai), armed conflict losses (-p), economic wear (P), level of armed conflict tension (f), level of diplomatic negotiations (g), and total economic leaking (Xt). To illustrate the model, we apply it to evaluate an imaginary armed conflict between the People’s Republic of China and Japan.

Keywords: Armed conflict, War, Economic modeling, Economic desgrowth

JEL Classification: R11, R12

Suggested Citation

Ruiz Estrada, Mario Arturo and Park, Donghyun and Kim, Jungsuk, An Economic Model of the Wartime Economy: An Application to a Possible Sino-Japanese Conflict (January 10, 2016). Fudan Journal of Humanities and Social Sciences, 9(3):425-447, 2016. Available at SSRN: https://ssrn.com/abstract=2713537

Mario Arturo Ruiz Estrada (Contact Author)

University of Malaya (UM) - Faculty of Economics & Administration (FEA) ( email )

Kuala Lumpur, 50603
Malaysia
+60126850293 (Phone)

HOME PAGE: http://ssrc.um.edu.my/

Donghyun Park

Nanyang Technological University (NTU) ( email )

S3 B2-A28 Nanyang Avenue
Singapore, 639798
Singapore

Asian Development Bank

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Jungsuk Kim

Sogang University - Institute of International and Area Studies ( email )

35 Baekbeom-ro
Mapo-gu
Seoul, Seoul 121-742
Korea, Republic of (South Korea)

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