Russian economic development under forceful defense spending growth

Oleg V. Buklemishev ()
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Oleg V. Buklemishev: Lomonosov Moscow State University, Moscow, Russia

Russian Journal of Economics, 2024, vol. 10, issue 4, 319-1

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.

Keywords: fiscal; stimulus; military; Keynesianism; defense; spending; budget; multipliers; inflation (search for similar items in EconPapers)
JEL-codes: E12 E61 E62 H56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:arh:jrujec:v:10:y:2024:i:4:p:319-1

DOI: 10.32609/j.ruje.10.141382

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