Applied Mathematics Model: The Effect of National Defense on Economic Growth seen from the Supply Side

Abstract

The study aims to develop a mathematical model that can explain the effect of national defense on economic growth from various works of literature and developments. The overall impact of military spending on growth can be analyzed by dividing the economy into sectors. We wish to demonstrate the formation of a general mathematical model. The model building is based on the neoclassical production function approach developed by Feder and Deninson. The source of Deninson's growth model uses a supply-side description of changes in aggregate output. It describes aggregate growth in terms of changes in capital and labor. The resulting aggregate growth equation shows the combination of externality and productivity effects.