Defense Budget Interactions Revisited,
Abstract
The Despres-Dhrymes (D-D) model AD-529 491L of defense budget interactions between the U.S., the Soviet Union, and the PRC is reexamined in light of the new CIA estimates of Soviet defense spending and the availability of a statistical technique that accounts for the simultaneity in the model's equations. Using a common data base, the D-D model is reestimated using their single-equation technique, and the results are compared with the simultaneous equation technique. Neither technique yields estimates that can aid in the selection of strategies for the U.S. in the long-term competition. As currently formulated, the adjustment process that underlies the D-D model may not be a very good description of the world. Certain assumptions of the model are indeed troublesome, and whatever interaction process exists may be concealed by the model's lack of discrimination in the composition of defense expenditures perceived by each side. It therefore seems worthwhile to explore interactive models that deal with specific arenas of the military competition and that allow for asymmetric lags and systematic misperceptions (for example, the elusive missile and bomber gaps) by one side or another.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 1977
- Accession Number
- ADA068376
Entities
People
- Robert Shishko
Organizations
- RAND Corporation