Macroeconomic Effects of a War with Iraq

Earlier this year (2003) with the looming and seemingly inevitable conflict in Iraq drawing increasingly near, doubt from various areas and parties arose over the justification of a war in Iraq. If Iraq invaded Australia or the U.S. then an inarguable case is presented for action and as a consequence; increased military spending is necessary, expected and enjoys an unquestioned existence. In contrast, the reality of the recent situation involved great uncertainty over the justification of a war. Consequently, the issue of economic cost was included in much of the political debate which filled the turbulent atmosphere that preceded the start of the conflict in the Middle East. Garnaut (2003) provides such example of this in his Sydney Morning Herald article 'Conflict tipped to rip billions from local economy'.…