Abstract
The effect that war has on the economy has long been investigated. However the results of investigations do not provide conclusive answers. The ‘War destruction view’ argues that war has a negative effect as war distorts the economy and destruct resources. The ‘War construction view’ argues that war has a positive effect as war improves efficiency in economy and facilitates technological innovation by destroying the existing political structures and economic facilities. We propose a new and promising explanation of what happens to the economy following war: the course of the postwar economy is a consequence of the industrial technology accumulated and the cultivation of engineers during the war. We investigate this explanation for nations involved in World War II during the period 1950–1960 by utilizing econometric models. We find that the technological strength and industrial production capability that a nation accumulated during the war is an important factor for economic growth.
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Kim, TY., Jeong, G., Lee, J. (2014). War, Peace and Economic Growth: The Phoenix Factor Reexamined. In: Economic Growth. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-40826-7_8
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DOI: https://doi.org/10.1007/978-3-642-40826-7_8
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