SMOKE: (A Small Model of the Korean Economy).
RAND CORP SANTA MONICA CA
Pagination or Media Count:
This document describes SMOKE a Small Model of the Korean Economy, a compact analytical tool developed to study economic and defense tradeoffs in the Republic of Korea. SMOKE is a supply model it focuses on the growth and interaction of the factors of production rather than on the sufficiency of demand to employ these factors. This economic model suggests that 1 the military share of the GNP in Korea will likely rise over the next decade 2 GNP growth will gradually slow over the next decade as diminishing returns to capital deepening are encountered 3 an investment-intensive military buildup dampens economic growth less than a labor-intensive buildup because the latter reduces the inputs to civilian production whereas a capital-intensive buildup largely reallocates the end uses of production and 4 the advantages of capital-intensive military forces will grow over time as labor becomes more valuable in the economy. Keywords Military budgets. Author
- Economics and Cost Analysis