Research On War Economic Cost And The Ability Of National Economy To Support It

Because resources are scarce, the state must always consider whether to ensure security or make profits. The value of the good or service forgone is the opportunity cost of the war. Through cost study, on one hand, the paper hopes to help the state "to be adept at warfare", that is to make a "resouce-saving" war by questing for effective ways to reduce the cost and to control war timetable and national economy at wartime; on the other hand, "to end the war", the paper appeals for people's alert by revealing the state's, the nation's and even the human's enomous losses caused by war. War cost and affordability of the national economy is a relatively new fundamental research in the field of mobilization. Based on the basic logic of macroeconomics, empirical methods of econometrics and paradigm of modern economics, the paper is divided into two parts: theoretical assessment and empirical calculation. Under the framework of mordern economics, the first part establishes theoretical assumptions and mathematical models in use of logical reasoning method to assess war economic inputs and war economic losses. Empirical part firstly defines the time, the place and the parties of the war in detail. Then the paper analizes the theoretical assumptions determining the economic cost of war by econometric test methods. At last, through repeated tests of the modified linear regression model, the paper estimates the state's possible war inputs and losses on the basis of 2008 national economy forecast data.The calculated results indicate that the ratio of the state's new military inputs at wartime to GDP of the same year has dropped substantially. Due to the destruction of economic assets, the decrease of investment and consumption, and trade disruption, the gross domestic product at wartime will decline in varying degrees. The GDP loss caused by war is about 28.9% of GDP at the state of no war. Compared with the forecast GDP in 2007, economic development declining ratio is about 22%, roughly equivalent to the national economic output in 2005. The level of economic development retrogresses about three years, while residential consumption level about five years. Research suggests that the supportability and affordability of the national economy to war incereases sharply. In the future, we can further reduce the economic hurt of war and then cut down the war conomic cost through means such as sustainedly increasing military expenditure, implementing anti-intervention strategy, enhancing military offensive capability and deterrence capability, expanding the national economy basis, transforming economic growth mode, adjusting the industrial structure and layout, establishing capital flight control mechanism, economic regulative mechanism, and also diversifying trade structure.