In ‘Star Wars,’ Was the Death Star Too Big to Fail?

At the end of “Star Wars: Episode VI — Return of the Jedi,” the heroic Rebel Alliance defeats the evil Galactic Empire, destroying the second Death Star, the empire’s central space station (and superweapon). Audiences typically respond to the destruction of the Death Star with triumphant cheers.  But over the years, a number of perhaps more reflective fans have paused to question the consequences of this event. In his movie “Clerks,” for example, the writer and director Kevin Smith has his protagonists debate the ethics of destroying the second Death Star, whose construction was still underway, given the collateral damage to the contractors (“plumbers, aluminum siders, roofers”) building it.
As a financial engineer, Zachary Feinstein has another concern: the economic repercussions for the “Star Wars” galaxy. In a recent working paper, he brought the analysis of financial systemic risk to bear on this question.