Wars Bring Lasting Economic Costs as Defense Spending Forces Hard Choices

War is again defining the global landscape. After decades of relative calm following the Cold War, the number of active conflicts has surged in recent years to levels not seen since the end of the Second World War. Meanwhile, rising geopolitical tensions and heightened security concerns are prompting many governments to reassess their priorities and spend more on defense. Beyond their devastating human toll, wars impose large and lasting economic costs, and pose difficult macroeconomic trade-offs, especially for those countries where the fighting is taking place. Even without active conflicts, rising defense spending can raise economic vulnerabilities in the medium…