On the Economic Mechanics of Warfare

Vandenbroucke, Guillaume

doi:10.20955/wp.2023.007

Working Paper Revision

On the Economic Mechanics of Warfare

Abstract: A large literature is concerned with war finance, but there is little by way of understanding how war-related expenditures affect the economically-relevant outcomes of wars, e.g., prevailing side, duration, or destruction and casualties. I present a model of attrition in which I characterize the effects of resources on the outcomes of war for a military conclusion (when one side cannot fight anymore) and a political conclusion (when one side does not want to fight anymore). I discuss the role of GDP for both types of conclusion. I also analyze the mechanics of third-party support to a small country at war with a large one, e.g., Ukraine and Russia. Finally, I show that the model can fit actual battle data.

Keywords: war; attrition; military spending;

JEL Classification: E6; H56; N4;

https://doi.org/10.20955/wp.2023.007