Macroeconomic Strategy in Wartime
In 2001-02 the United States has been hit by two quite diﬀerent shocks, terrorism and recession. As usual in time of war, national defense is the highest priority for use of the country’s resources. Although the opportunities for international warfare are limited, the challenges to the homeland are virtually unlimited. The president’s ﬁscal year 2003 budget includes $48 billion additional for the military and $38 billion additional for homeland defense.