Question A:
The likely need for increased European public investment in defense should come with substantial reallocations of public budgets at the national and EU levels.
Responses
© 2025. Kent A. Clark Center for Global Markets.
15%
2%
0%
0%
11%
52%
20%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
0%
8%
58%
34%
Question B:
Greater use of joint EU-level procurement of military equipment and defense research/innovation would promote substantially enhanced capacity in Europe's defense industry.
Responses
© 2025. Kent A. Clark Center for Global Markets.
15%
2%
2%
0%
11%
50%
20%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
4%
0%
12%
52%
32%
Question C:
Increased defense spending would deliver a measurable boost to economic growth in Europe over the next five years.
Responses
© 2025. Kent A. Clark Center for Global Markets.
15%
0%
0%
4%
57%
22%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
4%
63%
28%
4%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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My view is that defence spending needs to increase substantially to somewhere between 3-4% of GDP. In most EU Nato countries and the UK this is a substantial amount. Doing it by reallocating won't work in most so some of both is required but primarily broad based tax increases.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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A reallocation from current spending to Investment is needed in several countries, although some could borrow more.
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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evidence of substantial duplication
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 Richard William Blundell |
University College London | Bio/Vote History | ||
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 Maristella Botticini |
Bocconi | Bio/Vote History | ||
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Luis Garicano |
LSE | Bio/Vote History | ||
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There is no free lunch: guns or butter.
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 Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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 Rachel Griffith |
University of Manchester | Did Not Answer | Bio/Vote History | |
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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 Sergei Guriev |
London Business School | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Some countries have more fiscal space than others
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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An increase in defense spending to 3 or 4 percent of GDP cannot be achieved by simply creating a one-time special purpose fund, or by increasing debt. Unless taxes are raised which is unlikely, given the high taxation level in most EU countries, budget rebalancing is necessary.
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 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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At least in the medium to long run budgets need to be adjusted to the new realities
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 Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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 Costas Meghir |
Yale | Bio/Vote History | ||
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Richard Portes |
London Business School | Bio/Vote History | ||
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Cut CAP!
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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 Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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 Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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There is a budget constraint.
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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 Silvana Tenreyro |
LSE | Bio/Vote History | ||
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 Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Karl Whelan |
University College Dublin | Did Not Answer | Bio/Vote History | |
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Plenty of savings are available at EU level (cohesion funds, CAP) and at national level.
|
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
There are many increasing returns to scale in defence industries. So more collaboration would be helpful. Diversification in terms of weapons systems is also a good idea since they don't all work equally well. So a trade-off is desirable.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Conditional on efficient allocation process.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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Richard William Blundell |
University College London | Bio/Vote History | ||
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Bio/Vote History | ||
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Economies of scale and specialization are crucial. We already spend more than Russia, only together we can make it count.
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Did Not Answer | Bio/Vote History | |
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
London Business School | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Increased spending does not automatically lead to increased investment in the relevant industries, because procurement may happen in the international market, particularly the US.
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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Costas Meghir |
Yale | Bio/Vote History | ||
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||||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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By itself, demand does not create its own supply in an economy open to trade.
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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A lot depends on whether the EU can keep the corruption down in how contracts are awarded.
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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One-size-fits-all in procurement doesn't work. Size is nothing in this business - look at the capable industries of Israel and Switzerland
|
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Karl Whelan |
University College Dublin | Did Not Answer | Bio/Vote History | |
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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In theory, yes. But the defence industry is highly protected in nearly every country.
|
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Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
|
Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
Depending on the nature of the increase, it may do.
|
||||
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Pol Antras |
Harvard | Bio/Vote History | ||
|
All this stuff is super far from my expertise.
|
||||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Multiplier of investment is higher than that of current spending.
|
||||
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
depends how it is financed...
|
||||
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Richard William Blundell |
University College London | Bio/Vote History | ||
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|
||||
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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|
||||
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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|
||||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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|
||||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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|
||||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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|
||||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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|
||||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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||||
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Luis Garicano |
LSE | Bio/Vote History | ||
|
There is going to be certainly a lot of idle capacity in industry. But whether 1% (max) extra) GDP on defense will meaningfully affect growth is unclear. I believe the constraints to growth are others (notably energy).
|
||||
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Did Not Answer | Bio/Vote History | |
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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||||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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|
||||
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Sergei Guriev |
London Business School | Bio/Vote History | ||
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|
||||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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If associated with deficit spending, probably yes
|
||||
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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|
||||
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Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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It all depends on where procurement will take place, and thus where the defense industry will grow - in the EU, or abroad.
|
||||
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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||||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Possible but depends on whether the increase is funded with debt or cuts elsewhere.
|
||||
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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||||
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Costas Meghir |
Yale | Bio/Vote History | ||
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|
||||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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|
||||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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|
||||
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Richard Portes |
London Business School | Bio/Vote History | ||
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||||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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||||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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||||
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Imran Rasul |
University College London | Did Not Answer | Bio/Vote History | |
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||||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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||||
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
|
It depends on what that defense spending is on. If, for instance (but sadly not hypothetically), if defense spending means spending on pensions of retired personal, then no.
|
||||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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||||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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||||
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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|
||||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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|
||||
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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|
||||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
|
It depends on how much Europe relies on imports of defence and military equipment versus domestic production
|
||||
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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||||
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John Vickers |
Oxford | Bio/Vote History | ||
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||||
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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||||
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Karl Whelan |
University College Dublin | Did Not Answer | Bio/Vote History | |
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||||
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
It depends how it is financed: deeper or unchanged deficits.
|
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