The economic consequences of defence spending

In this study we look at the expected economic effects of the increasing defence spending in the Netherlands, and how policy can influence economic outcomes. The Netherlands, along with other NATO member states, has committed itself to spending 3,5% of GDP on defence by 2035. This will affect Dutch public finances, prices, investments in research and development (R&D), and the national sectoral composition. DNB is interested in these effects because inflation, public finances, and sectoral economic developments in the Netherlands are affected. With this study we aim to shed light on these dynamics and contribute to the policy debate on economically efficient defence spending.