The Relationship between Inflation and Defense Expenditures

摘要

This paper examines the relationship between DOD expenditures and the rate of inflation to determine whether military spending is inherently more inflationary than other types of expenditures. The role of DoD outlays in the context of various theories of inflation is analyzed and the available empirical evidence is considered. It is concluded that there is no evidence that the effect of DoD purchases is different from that of non-defense federal purchases.