ABSTRACT
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book presents a quantitative investigation of the macroeconomic effects of different fiscal and monetary policies that have been used to finance wars in the US It examines both positive and normative effects of historical government policies. Most wars in the US have been financed primarily with nominal (dollar denominated) government debt and money creation, rather than with contemporaneous distorting taxes. While distorting taxes rose somewhat during US war episodes, the extra revenue from higher taxes typically fell far short of government spending requirements. The book analyzes some issues associated with the conduct of wartime monetary policy. While it was common to print money during wars to help finance the war effort, it was also common to pursue a deflationary policy after the war ended and return the price level to its prewar value.
