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SOME IMPLICATIONS OF THE ECONOMIC IMPACT OF DISARMAMENT ON THE STRUCTURE OF AMERICAN INDUSTRY *
Author(s) -
Kokat Robert G.
Publication year - 1966
Publication title -
kyklos
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.766
H-Index - 58
eISSN - 1467-6435
pISSN - 0023-5962
DOI - 10.1111/j.1467-6435.1966.tb00836.x
Subject(s) - disarmament , offset (computer science) , economics , production (economics) , defence industry , private sector , industrial organization , business , microeconomics , economic policy , computer science , economic growth , archaeology , history , programming language
SUMMARY To investigate some of the major structural problems which might arise from disarmament, an input‐output model was constructed specifying three full‐employment patterns of end product deliveries which might reasonably be expected for the year 1970. The purpose of the model was to measure the impact of varying compositions of final demand accompanying a reduction in defense expenditures on the production capabilities of sixty‐six processing sectors. Each disarmament pattern was stipulated with respect to a specific level and composition of defense expenditures in conjunction with a compensating policy offset. The relative impact on total industry requirements was discerned by comparing the derived output levels of each industry under the alternative policy formulations. An analysis of the computational results lead to the following five major conclusions: 1. A fifty per cent reduction in defense outlays, offset by compensating increase in expenditures within either the private or public sector, will affect the industries producing weapons substantially but will have little effect on supporting industries. 2. The magnitude of the shift in final demand postulated was not large enough to pose structural problems. 3. The derivation of the indirect requirements indicated that the processing sectors are quite consumer oriented. Indeed, this dependence was so strong that substantial shifts between other major categories of final demand were dampened considerably. 4. Industry sensitivity to variations in final demand patterns was diminished markedly by the pattern of accompanying intermediate demands. 5. The effect of public policy was not significant to the output levels of industries supporting the military oriented industries.