Levy, Amnon and Faria, Joao Ricardo, 2007, Ramsey in Dual-Population Lands: Internal Conflict and Utility-Maximizing Consumption, Defence and Peace Economics, 18(4), 339-352.
Ramsey’s model is extended to three possible scenarios of conflicts in dual-population lands: partition, federation and civil war. The federally utility-maximizing consumption-growth rate in a strictly political federation might be lower than that under partition for the wealthier and more slowly multiplying group. This group may benefit from joining a federation that facilitates technological transfer and from obeying the federal no-arbitrage rule as long as its own technology is inferior to the hybrid. The utility-maximizing consumption growth rate for a group engaged in a civil war is larger than those under partition and a strictly political federation if its rival’s warfare is mainly aimed at inflicting casualties and is likely to be smaller when its rival’s warfare is mainly sabotage.