DEFENSE IMPACTS ON INTERNATIONAL PAYMENTS.
INSTITUTE FOR DEFENSE ANALYSES ARLINGTON VA PROGRAM ANALYSIS DIV
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This paper describes an approach for evaluating many of the economic considerations relating to the DoD impacts on the US balance of payments position. Calculation of the balance of payments improvement from lower DoD procurement abroad must take into account, in addition to the cut in spending, the resulting loss in US export earnings. The United States can obtain balance of payments improvement from expansion of military exports only by sales to industrial allies. These benefits must be weighted against the risk that additional sales may prove detrimental to US interests. Computation of the balance of payments improvement from increased sales to other nations must take into account an induced loss of civilian exports. Author
- Economics and Cost Analysis