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Russian economic development under forceful defense spending growth

Author

Listed:
  • Oleg V. Buklemishev

    (Lomonosov Moscow State University, Moscow, Russia)

Abstract

The article examines historical aspects, general economic logic, and theoretical discussions on the policy of stimulating the economy through increased government appropriations for defense items. It provides a brief overview of empirical studies on economic effects of defense spending in Russia and other countries. The secondary nature and low manageability of economic effects of defense policy are emphasized. The size of the fiscal impulse due to defense items of government expenditure, its positive and negative effects are analyzed in the Russian economy for the period 2022–2024. In addition to the unlikely gains through security and supply channels, the limited availability of free production capacity and labor force are stressed among the factors hindering the positive demand effects of increased defense spending. This gives rise to inflationary consequences, as well as the contradiction between tightening monetary conditions and continuing fiscal stimulation. A conclusion is made about the prevalence and possible aggravation of negative outcomes of sustaining and expanding military outlays.

Suggested Citation

  • Oleg V. Buklemishev, 2024. "Russian economic development under forceful defense spending growth," Russian Journal of Economics, ARPHA Platform, vol. 10(4), pages 319-311, December.
    • Handle: RePEc:arh:jrujec:v:10:y:2024:i:4:p:319-1
    DOI: 10.32609/j.ruje.10.141382
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    More about this item

    Keywords

    fiscal stimulus military Keynesianism defense spending budget multipliers inflation;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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