Is there any grounds to the theory that a major war always occurs after a recession? It's a theory that was put to me recently and I have not looked into it. I look forward to hearing your views on this.
No, this recession came about because banks in America gave mortgages to people who could not afford their repayments(sub prime) and the whole thing spiralled from there.
The theory that was put to me was that through a major war you lower the social welfare population and then when it's over you create employment in construction as there's a lot of rebuilding to be done.
Sounds like a bit of a quack theory to me.
war is foreign policy by other means and is just a form of politics, it is on an economic level a huge raft of public spending.
You need to pay, clothe, equip and feed the troops this creates employment.
You're just as likely to find that recession follows wars, or even more likely, no correlation.
Here in the U.S. we experienced severe recessions in 1973-74, 1982-84 and smaller one at the begiining ot 1991. The recession in the 1980's was actually more severe than what we are currently experiencing. None of these were followed by armed conflicts of any major porportion. You may actually be referring to a "Depression" as in the Great Depression of 1929 to 1941, which was certainly followed by WW II and ended the Depression. A case could be made for that instance, I think...