Policy publications

Macroeconomic impacts of higher defence spending: a model-based assessment, with Nikola Bokan, Pascal Jacquinot, Magdalena Lalik, Georg Müller, and Romanos Priftis. ECB Economic Bulletin, Issue 6/2025.

This article uses a suite of models to analyse the macroeconomic impact of higher government defence spending. In June 2025 members of the North Atlantic Treaty Organization (NATO) committed to increase core defence and other related spending by a volume unprecedented in recent history. In light of this pledge, we revisit the size of fiscal multipliers and their determinants across a range of ECB macroeconomic models. This article complements previous ECB analyses by highlighting the role of model differences in the quantification of economic effects of public spending.

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