Question

The broken window fallacy was first expressed by the great French economist, Frederic Bastiat.

In Bastiat's tale, a man's son breaks a pane of glass, meaning the man will have to pay to replace it. The onlookers consider the situation and decide that the boy has actually done the community a service because his father will have to pay the glazier (window repair man) to replace the broken pane. The glazier will then presumably spend the extra money on something else, jump-starting the local economy. The onlookers come to believe that breaking windows stimulates the economy

Along the same line of reasoning would you agree that going to war stimulates a country's economy? Why or Why not?

Answer 1

In terms of economy if we look yes, going to war will simulate the economy since this will increase the government spending particularly on defence purchases, which will increase income for defence equipment manufacturing companies, alongside employment in defence sector leading to overall increase in Consumption level in the economy and causes the GDP growth to spike but if we look other part this will also result in tremendous amount of pressure on government finances leading fiscal deficits to ballon and also the currency depriciation.