How defence spending will shrink global imbalances and weaken US
Oliver Harvey, Mallika Sachdeva
Abstract
We argue rising defence spending will shrink global imbalances with important implications for interest rates and the dollar.
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Community Reviews
Isaac Chan
11/2/2026
Fascinating new perspective on the relationship between defence and global imbalances here - the unwritten pact between Washington and the NATO allies: Washington bankrolls the NATO allies' defence spending; in return, the NATO allies finance America's consumption binge (through their savings from defence)