October 15, 2004

Economic consequences of buying corvettes; a welfare-theoretic analysis

Nu aanschaffen korvetten is economisch niet gunstig

Press release

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Spokesmen

Dick Morks Read more

The costs of the purchase of the corvettes appear to be greater than the benefits related to (the delay of) avoidance of once-only adjustment costs due to a loss of jobs. The costs consist of government support in the form of the option value, pre-finance and the guarantee to purchase from the Dutch naval shipbuilding cluster. Policy makers should weigh the welfare-theoretic benefits of delaying a decision after 2015 against the value of possibly less fighting power during 2006-2015 and the loss of national identity, because the Netherlands cannot proudly present itself with a fleet of its own design and make. Finally, preserving a naval shipbuilding cluster in the Netherlands is likely to require government support time and again.

This publication is in Dutch.

Contacts

Bert Minne Read more

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