The economics of homeland security | The University of Chicago Booth School of Business

The economics of homeland security | The University of Chicago Booth School of Business.

very interesting article.

So when governments want to evaluate whether sizeable investments in national security are worthwhile, the interest rate at which future benefits are discounted should be low, the authors argue. The lower the discount rate, the bigger the present value of the benefits. 

National security investments intended to mitigate certain threats can offer protection against a variety of related risks, the study contends. Investments that prepare countries for major warfare, for example, can avert smaller conflicts, protect external supplies of critical resources such as oil, and preserve the sovereignty of important trading partners. 

On the other hand, the authors argue that “peace dividends,” which benefit countries that avoid conflict, can lead to reduced national security investments, which can, in turn, leave countries more vulnerable to other dangers.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: