Comments by "SterileNeutrino" (@SterileNeutrino) on "Rus Prepares Storm Rabotino, Pobeda Clear Avdeyevka; Despondent Zelensky Tours Front, Assange Appeal" video.
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While the Russian economy seems rather resilient, let me note that Sean Foo in "EU Goes FULL War Economy, German Companies Flee to China, Milei Demands Total Dollarization" had this slide up based on "The Effect of War on Economic Growth", Cato Journal, Winter 2020 🧐
While wars are destructive of physical and human capital, the impact of war on GP per capita is unclear. This ambiguity is fundamentally due to the way national income accounting deals with killing people and destroying things during war. Producing weapons and munitions is counted positively, while killing people and destroying things is not counted at all. On the one hand, war can increase GDP per capita by reducing unemployment and by shifting people from family formation and other nonmarket activites into wartime production. On the other hand, even with the failure to account for the destruction of physical and human capital or the loss of nonmarket activity, war can lower GDP per capita by reducing labor and total factor productivity through the destruction of existing physical and human capital and by reducing investment in new physical and human capital. War can also reduce GDP per capita by reducing gains from both domestic and foreign trade.
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