Following  4  For example, Hamilton (1977) notes the difficulties for the US administration in obtaining taxes to finance the American War of Independence 1775-1783: “Our revolutionary ancestors were willing to fight … for [the] country; but hardly anyone was willing to pay taxes for it.” (p. 14). Hall and Sargent (2022) compare the US financing of “three world wars”, where the third world war refers to the war against COVID-19. They find that tax financing was significantly lower during the corona pandemic than during the First and Second World Wars. 5 Rockoff (2015). The Vietnam War is an exception, to the extent that it can be described as a minor war. Part of the funding then came through printing money. 6 Bomberger and Makinen (1983). Another possibility is that the government simply refuses to pay its debts, which is of course associated with major problems with regard to future confidence. 7 Hanke and Krus (2012). 3 [14]  Russia's invasion of Ukraine, rising energy and commodity prices have of course been an important reason behind the increase in global inflation. War can also mean that people are forced to flee, which requires increased public spending in the countries where the refugees are received. This may have some effects on inflation in the recipient countries. The most significant example of huge waves of refugees is, of course, in connection with the Second World War.
A more recent example is the people fleeing from the war in Syria, and we are now seeing a similar development in connection with the war in Ukraine. Depending on the circumstances, war may also give rise to a period of sharply increased geopolitical uncertainty. This may mean that countries that are not directly involved in the war choose to arm themselves and thus increase public spending. However, greater uncertainty about the future may also mean that the private sector chooses to postpone investment and increases its precautionary saving. There are thus counteracting effects on aggregate demand and thereby on inflation. All in all, there are thus a number of different ways in which war can lead to inflation rising, both in individual countries and in the world economy as a whole. Four periods of high inflation since 1900 This is something that is quite clear when studying a longer time series for inflation. Figure 1 shows inflation in Sweden from 1900 onwards. Figure 1.