would push resources into storage to recover some diversification, thereby reducing goods available when the war breaks out.
Analyses of the management of wartime economies consist of a set of prescriptions for centralized market control with little consideration of how policies fit into the objectives, technology, and strategy of a country engaged in war. Our objective has been to construct a general equilibrium war-game model in which particular war policies emerge in a Nash equilibrium. Specifically, we have integrated a war model with an existing model of financial crisis to examine the emergence of the use of financial weapons. We have found that financial warfare in the form of an asset freeze or a counterfeiting attack will emerge as an equilibrium outcome of a war game. In the narrow case represented by our model, financial warfare, by precluding potential industrial projects, will reduce the measured magnitude of the war, defined as the total amount of resources converted to war goods. We have also found that a counterfeiting attack is more damaging to war potential than an asset freeze.