Peace Dividend

AAA

DEFINITION of 'Peace Dividend'

The money that becomes available in a national government's budget when the country is at peace, and can afford to reduce its defense spending. The term "peace dividend" is also used to refer to an increase in investor confidence that sparks an increase in stock prices after a war ends or a major threat to national security is eliminated. The money saved from defense spending is usually used towards housing, education and other projects.

INVESTOPEDIA EXPLAINS 'Peace Dividend'

During the four decades of the Cold War, U.S. defense spending averaged 40% to 50% of total federal spending. The massive drop in defense spending in the years following the Cold War are commonly called a peace dividend. U.S. defense spending represented about 15-20% of the federal budget in the first decade of the 2000s, with the country fighting wars in Iraq and Afghanistan.

RELATED TERMS
  1. Budget Deficit

    A status of financial health in which expenditures exceed revenue. ...
  2. Fiscal Policy

    Government spending policies that influence macroeconomic conditions. ...
  3. Deficit Hawk

    Slang for someone who wants the government to keep the federal ...
  4. Treasury Budget

    Data released by the U.S. Treasury on a monthly basis that accounts ...
  5. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  6. Federal Debt

    The total amount of money that the United States federal government ...
Related Articles
  1. War's Influence On Wall Street
    Bonds & Fixed Income

    War's Influence On Wall Street

  2. Breaking Down The U.S. Budget Deficit
    Options & Futures

    Breaking Down The U.S. Budget Deficit

  3. Terrorism's Effects On Wall Street
    Options & Futures

    Terrorism's Effects On Wall Street

  4. Invest In Dividend Aristocrats With ...
    Chart Advisor

    Invest In Dividend Aristocrats With ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center