Title: War and Inflation | Gold Eagle
Headings: War and Inflation
War and Inflation
The Fiscal and Monetary Effects of War
The Investment Environment Today

Content: Professor Fischer also provides an interesting perspective on war-related inflations in the 20th century: "Inflation surged after America joined World War I in 1917, then declined after 1919, but to pre-war levels. After World War II, Korea and Vietnam, war-inflations were not followed by a decline at all. Prices continued to climb." Professor Fischer had some interesting things to say about the Korean War: "In its economic impact the Korean War was similar to the world wars that had preceded it. Once again, inflationary pressures surged throughout the world. In 1950, wholesale prices jumped 12% in the United States, 18% in Germany, 21% in Britain, 28% in France, and 32% in Sweden." Professor Fischer discusses the inflation that took place as part of the Vietnam War and as part of the 1973 Yom Kippur War. He says that the Vietnam War was not the pivotal event in the acceleration of inflation during the 1960s, although he admits that the Johnson administration's decision to expand public spending for social welfare at the same time that it fought a major war in Southeast Asia, without a large increase in taxes, was a major miscalculation.