Macroeconomic scenario building for Strategic National Defense Planning

摘要

A variety of uncertainties make defense planning a difficult task even under the best of circumstances. The more varied threat environment in the post-Cold War era, the high price of replacing aging weapon systems and other uncertainties make contemporary planning even more problematic. There is a clear need for more and better tools to address the uncertain variables in the planning equation. This study explores such tools. It deals explicitly with two levels of uncertainty. The first level is captured with the method of scenarios (from Peter Schwartz). The second level is the gbsusualgcs variability of economic affairs within each scenario. This second level is captured using standard econometric and simulation methods. The benefit of this approach is mainly insights for planners b1s primarily into the sources of uncertainty and their effects (as opposed to point estimates). The Peoplegass Republic of China (2001-2021) is offered as an illustrative exercise. Within that case, we address uncertainty among three scenarios for Chinagass economic future, as well as sources of variance within those scenarios.