Capital Destruction, Optimal Defense and Economic Growth

Borradores de Economia
Number: 
257
Published: 
Classification JEL: 
D23, D74, E21, O41
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy
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The effects of capital destruction are endogenized in a neoclassical growth model where the economy can optimally allocate part of its labor force to defend capital from being destroyed. The purpose is to explain the optimal allocation of the labor force