Estimating economic benefits of naval forward presence
Abstract
This study extends the analysis of the economic benefits of naval crisis response enabled by forward presence undertaken by the Naval Postgraduate School for the 1997 Quadrennial Defense Review (QDR97). That study developed an operational methodology for quantifying these benefits. Drawing on that methodology, significant economic benefits were found associated with naval crisis response in the Arabian Gulf. The current study expands the QDR97 effort in several important directions. First, event analysis is introduced to link naval crisis response with price movements in key commodity, exchange, and share markets. Second, several new cases, one not directly involving oil, are developed to assess the generality of our findings. The findings of the first study are confirmed with naval forward presence/crisis response shown to produce extensive economic benefits for the US economy in each of the cases examined. Taken together, the two studies suggest that the economic benefits associated with naval forward presence/crisis response occur in a wide variety of crisis situations and geographical locations. More importantly, increased globalization together with the revival of tight oil markets will, for the foreseeable future, only reinforce the economic contributions made by forwardly deployed forces.
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.NPS Report Number
NPS-OR-01-004Related items
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