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The Indicator from Planet Money

War: The cost to Russia

The Indicator from Planet Money

NPR

Business

4.79.2K Ratings

🗓️ 30 March 2022

⏱️ 9 minutes

🧾️ Download transcript

Summary

In the past, war can sometimes boost parts of the economy. After World War 2, the United States emerged as an economic superpower. The same, however, is highly unlikely for Russia in its current war with Ukraine.

Transcript

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0:00.0

NPR.

0:11.7

This is the indicator from planet money.

0:13.4

I'm Stacey Vanick Smith.

0:14.9

And I'm Patty Hirsch.

0:15.9

Russia's economy is being hammered thanks to its decision to wage war in Ukraine.

0:20.5

But war isn't necessarily bad for the economies of the nation's fighting it.

0:24.0

In fact, there can be economic upsides to fighting wars.

0:27.3

Exactly.

0:28.3

For example, the U.S. of course did not get into World War II for economic reasons,

0:32.9

but parts of the economy benefited greatly from that war.

0:36.0

The shipbuilding, aerospace, and auto sectors boomed when companies shifted to making military

0:40.9

equipment.

0:41.9

Farmsuitical sales went up, as did department store sales, also employment soared.

0:47.4

Now it was not all positive, of course, and a lot of the economy really suffered.

0:52.1

But in the end, the U.S. emerged from World War II as an industrial powerhouse.

0:56.8

And on the face of it, it seems that parts of the Russian economy could benefit from

1:00.5

the war with Ukraine.

1:01.5

I mean, the countries talked about reconfiguring supply chains to bring more manufacturing

1:06.0

capacity back into Russia and make it less reliant on the West.

1:09.0

And that could, in theory, invigorate the economy.

1:12.4

And then there are Russia's resources.

1:14.4

It is the third largest producer of crude oil in the world, the second largest producer

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