Sunday, 25 July 2021

Economic impact of war

 Aside from the very real human costs, war will also bring serious economic costs: loss of buildings, loss of infrastructure, reduction of labor, uncertainty, increase in debt, and normal economic activities Interruption.

In many cases, war will cause inflation, leading to peoples savings loss and increased uncertainty. For example, in the American Civil War, the Confederacy struggled financially to pay for the war. Therefore, they started printing money to pay the soldiers salaries. However, when they printed money, the value of the money quickly fell. Hyperinflation is often the result of the end of the war. For example, in the case of severe economic damage, Hungary and Austria experienced the highest hyperinflation rate (war and national debt) on record in 1946. During the war, we often saw a rapid increase in public sector debt. Both World War I and World War II were very expensive for Britain. In both cases, the national debt increased sharply. In the post-war period, due to reconstruction and the establishment of a welfare state, debt continued to increase.Expansion after the war). During World War II, Britain relied on American loans, which took decades to pay off. This was not involved in the first two years, and the increase in national debt was not so obvious. The United States benefited from the early sales of weapons and equipment to the United Kingdom

Although war may temporarily boost domestic demand, it is important to consider the cost of war. In particular, the opportunity cost of military expenditures, the manpower cost of loss of life, and the cost of post-war reconstruction. In addition, it depends on the type, duration, location and method of the war. (The cost of civil war) Civil war will have a devastating effect on the countrys economic development.It can reduce life expectancy and reduce GDP. A report entitled "Billions of Missing People in Africa" (Oxfam, 2007) estimated that the cost of war in Africa has been equal to the amount of international aid. n addition to the deaths of about 4 million people, the war also lost 9 billion pounds, accounting for 29% of its gross domestic product. The report also pointed out that continued wars and increased supplies of weapons may lead to increased incidences of gun violence and organized crime. (GDP loss) This is an example of Burundis estimated GDP loss during the civil war. It is calculated using estimated pre-war GDP and real GDP trends. It shows that the ten-year conflict is one of the main reasons for the decline in GDP, but it is also worse than the chart shows, because during the war, a large part of GDP was used for destructive military equipment. The decline in health services and education may be even greater.

War is always accompanied by debt and an army of demobilized soldiers. After World War II, debt was not an obstacle to growth. W the aftermath of the war was not always so positive. Britain fought after the end of the Napoleonic Wars and after the end of the First World War. In the 1920s, Britain was struggling with long-term unemployment: the job prospects for returning soldiers were terrible. However, after World War II, both the United States and Europe experienced full employment. The aftermath of the First World War and the need for reparations destroyed the German economy. In order to pay for repairs, Germany turned to printing money, which caused hyperinflation. The disagreements surrounding Germanys hyperinflation in the 1920s sowed the seeds of political extremism and future wars, but the Allied forces did not make the same mistakes after World War II. The United States provided generous assistance to Western Europe, helped the reconstruction process, and led to an economic miracle in Europe, especially Germany.

The opportunity cost of war deserves a brief mention. If the government spent another US$300 billion on military spending, the US$300 billion could have been used to build hospitals and schools. According to a report from the Watson Institute (reported by Reuters), the cost of the war in Iraq was US$2 trillion. This $2 trillion could have been used for more constructive development projects as well. (Psychological cost) The economic cost of war-military cost, etc. can be estimated. However, it is more difficult to estimate the psychological costs of war: the pain of death, suffering, fear and disability. Conflict can traumatize soldiers and civilians throughout their lives. In recent years, PTSD has become more widely accepted, but it is difficult to assess how the war has negatively affected the personnel involved.

Simply put, war can generate potential economic benefits. The innovation rate when the government invests in new technologies, p. predecessor. The development of radar/jet engines in World War II can be used for peaceful purposes. Changes in social attitudes. For example, women who entered the labor market after the First World War. (Domestic demand and unemployment) In the 1930s, J.M. Keynes advocated the use of government borrowing and public spending to reduce mass unemployment during the Great Depression. However, this was only the beginning of World War II, and there was political motivation to pursue sufficient expenditure. In the United Kingdom and the United States, the economy quickly achieved full employment, and when men joined the military, there were often shortages in key areas.

One of the theories behind achieving such prolific growth in war-torn regions is that the end of World War II and the instability of previous decades provided Europe with an opportunity to catch up with growth.

 

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