Peace dividend

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The peace dividend is a political slogan purporting to describe the economic benefit of a decrease in defense spending. It is used primarily in discussions relating to the guns versus butter theory. The term was frequently used at the end of the Cold War in the early 1990s, when many Western nations significantly cut military spending.

While economies do undergo a recession after the end of a major conflict as the economy is forced to adjust and retool, a "peace dividend" refers to a potential long-term benefit as budgets for defense spending are assumed to be at least partially redirected to social programs and/or economic growth. The existence of a peace dividend in real economies is still debated, but some research points to its reality<ref>Sanjeev Gupta, Benedict Clements, Rina Bhattacharya, and Shamit Chakravarti, "The Elusive Peace Dividend", http://www.imf.org/external/pubs/ft/fandd/2002/12/gupta.htm</ref>.

"Peace dividend" can also refer to the improved economy in Northern Ireland after the signing of the Good Friday Agreement.