Rising defence spending could boost European growth – ECB
But macroeconomic benefits depend on cutting personnel costs and imports
Higher defence spending may encourage innovation and productivity over the longer-term, say economists from the European Central Bank. However, macroeconomic effects are likely to materialise alongside greater domestic research and development (R&D), and capital-intensive, cross-country defence procurement.
In a research article published on September 24, Cristina Checherita-Westphal, Marta Rodríguez-Vives, Tibor Lalinský and Miles Parker use national accounts data to estimate defence
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