When the Hawks Come Home To Roost: The Macroeconomic Implications of the Peace Dividend

The end of the cold War and the breakup of the Soviet Union have many global implications, the most interesting of which is the potential for lasting peace. Lasting peace can allow the United States to change politically, militarily, and economically. One obvious concern is that this transition be as efficient as possible. Resources that are being freed up from defense-related endeavors can be shifted to alternative uses. How can we, as a society, ensure that the transition is smooth and efficient? If there is a 'dividend' of peace, are there government policies that will use the dividend most effectively? This paper addresses the economic implications of peace for the United States.