ABSTRACT
In this chapter, the authors build a simple model of arms rivalry and link it to the economies of the rivals via an economic growth equation. They use the model to illustrate and explore, via simple simulations, a variety of arms race/economic growth issues including the relationship between an arms race and economic growth during war. The authors distinguish three broad classes of studies of military expenditures and economic growth: developed country studies, developing country studies, and theoretical arms race models that incorporate economic growth as a key variable. They consider variables that influence the military spending/economic growth relationship: the state of the economy (full employment or idle resources; developed or less developed), economic and political system, culture and social organization, magnitude and composition of military spending, and presence or absence of arms rivalry and war.
