Economy & Politics
COMMENT. The U.S. traditionally finances wars through debt, but rising interest rates are placing tight limits on the war with Iran.
In the United States, policymakers recognized early the crucial role of financial markets and the Federal Reserve System in financing war. Today, given the already high level of government debt, their room to maneuver in a conflict with Iran is limited. This makes a prolonged war difficult.
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About the author
Gunther Schnabl heads the Flossbach von Storch Research Institute & is a professor at the University of Leipzig. He was an advisor at the European Central Bank and has conducted research at the Universities of Paris 1 Panthéon-Sorbonne, Stanford & Tokyo.
About the author
Research analyst and research assistant for economic policy at the University of Leipzig. Adam Smith and Carl Menger Fellow at the Mercatus Centre. Studied economics in Leipzig and Paris.
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