IoD claims short war will benefit US

Link: Threat of war divides FDs

The report War and the World Economy claims that in the most likeliest scenario – a short conflict with regime change – the US economy could grow by as much as 2.9% in 2003.

However, under the worst-case scenario, where the conflict were to escalate dramatically, the US economy could shrink by as much as 2% during the year.

In this case, the most adversely affected, according to the IoD, would be Japanese and euro-zone economies as they have ‘less scope to ease monetary and fiscal policy in response to any deterioration in their economy’.

Graeme Leach, chief economist at the IoD, commented ‘There are tremendous military, political and economic uncertainties facing the US and world economy this year.’

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