ABSTRACT
The growth-inducing effects of defence production are immersed in controversy. A specific defence production programme, the original ill-fated B-1 bomber of the Carter era, was estimated, at its peak, of being capable of generating 58,591 jobs. Circumstantial evidence certainly exists for the counter-cyclical role of defence production. Severe cutbacks in merchant ship production as a result of business cycle downturns have often been met by stepped up orders for naval construction. The potential linkage effects of defence industry, or any industry, can be gauged by means of input-output analysis. At its simplest, this analytical tool describes the particulars of the inputs required to produce a unit of output throughout the processing sector. Sustained operation of the military economy has produced a major concentration of income flows in certain industries, occupations and regions. Thus the newly expanding military industries received major allocations of capital and the geographic regions.
