Defence inflation is a recurring factor in determining defence spending. It is widely reported in official government publications and in the trade press, but remains relatively neglected by defence and peace economists. In this book, international contributors from Finland, Norway, Sweden, the UK and the USA distinguish between defence inflation and cost escalation, and identify the causes of both. They use specific case studies to address a wide variety of theoretical and empirical issues and key questions, including the following: Does defence inflation affect all countries? What are its effects? Why does it occur? How (if at all) can defence inflation be controlled? While most industry and trade press devote considerable ink and space to the discussion of defence inflation, cost escalation, and their consequential impact on the purchasing dollars of the armed forces, economists have been relatively silent. This book aims to rectify this oversight through a multinational survey and analysis of the topic, while also identifying the opportunities for further theoretical and empirical research in the field. This book was originally published as a special issue of the journal Defence and Peace Economics.

This book analyses the causes and consequences of deflation. In contrast to the widespread belief that deflation would be harmful to the economy as a whole, the author argues that free market deflation is liberating and beneficial. Several myths of deflation are exposed and the reasons for the widespread deflation phobia that serves to justify expansionary monetary policy, i.e., inflation are investigated. Two historical case studies, the growth deflation in the US after the Civil War and the bank credit deflation in Germany during the Great Depression are discussed to illustrate the points made in the theoretical analysis of deflation.