The United States and the European Union are not preparing for a war economy

Russia is clearly preparing for a long-running conflict in Ukraine, where it will commit ever greater amounts of military and human resources. For their part, the United States, the United Kingdom and the European Union are not clearly preparing to enter a war economy: Monetary policies are becoming restrictive, while in war economies, central banks choose to keep real short-term and long-term interest rates very negative in order to reduce the public debt ratio; Fiscal policies are becoming less expansionary again, with the debt ceiling in the United States, the planned return of the fiscal rules of the Stability and Growth Pact in Europe, and fiscal austerity in the United Kingdom; Governments' main concern remains to achieve a fairly rapid energy transition, not to prepare for a war economy, which would require other budgetary priorities.