Events at CERGE-EI

CERGE-EI is pleased to invite you to a seminar featuring Hippolyte Weneyam Balim from the IMF’s World Economic Outlook team in Washington, DC, who will present two analytical chapters from the Spring 2026 World Economic Outlook at our premises on Monday, May 4, from 4 PM.

This session explores the macroeconomic trade-offs of the global surge in defense spending, a trend driven by intensifying geopolitical tensions and commitments such as the NATO target to reach 5% of GDP by 2035. The findings reveal that while defense buildups can provide a short-term boost to economic activity, they are predominantly financed through higher deficits, leading to a typical increase in public debt of 7 percentage points of GDP within three years of a buildup's onset. We will specifically address the "guns versus butter" trade-off, examining how the prioritization of military outlays—particularly in wartime—often results in a substantial crowding out of real social spending on health, education, and social protection.

The second part of the presentation will examine the macroeconomics of conflict and the challenging road to recovery, noting that active wars have reached levels not seen since the end of World War II. We will present evidence showing that the average conflict-site economy suffers a 7% cumulative output loss over five years, leaving long-lasting scars on capital stock, employment, and productivity. Crucially, the seminar will outline the pillars of successful recovery, focusing on the vital roles of early macroeconomic stabilization, decisive debt restructuring, and international support in preventing relapses into conflict and facilitating the return of displaced populations.

We warmly invite you to attend this seminar and join the discussion on these highly consequential issues at the intersection of macroeconomics, fiscal policy, conflict, and recovery.

If you wish to join us in person or online, we kindly ask you to fill in a short registration form.

Meeting link: https://cerge-ei.webex.com/cerge-ei/j.php?MTID=mc33a50e48ddb857f19a885a459ec083a

Meeting number: 2744 029 0608

Meeting password: 448631