The impact of wars on the economy of countries: theoretical and practical aspects

Abstract

Wars leave deep traces in the country’s economy during and after the war, as well as social and psychological consequences. At the beginning of the economic consequences of war, there is a loss of labour. The withdrawal of skilled labour from the country due to the war, the reduction of the population as a result of injuries and deaths leads to serious losses in production and national income. The decline in production leads to inflation and the emergence of a «black» market, faced with difficulties in meeting the needs of the population, whose incomes are falling due to the war. The division of resources into army and defence needs during this period leads to bottlenecks in meeting the resource needs of many sectors, especially basic consumer goods. With war, it becomes impossible to provide new production tools, find loans, continue working without interruption in the face of possible enemy attacks, and increase production within the optimal norms of leasing. This study is intended to discuss the economic consequences of wars. The basic macroeconomic effects of war on the economy are discussed, and the economic costs of war through experiences of the most significant countries are explained with regard to World War I and II. The effects of the Syrian war on the Turkish economy are opened up, and political and economic recommendations are given.