How does war impact a country's economy?

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This is a very intelligent question. There are many too many variables to consider. In light of this, there will be many correct answers, because no two wars are identical. In light of this, the best way to proceed is to look at examples of various wars and examine the economic outcomes. 

First, if we look at the ancient world, the Romans enriched themselves greatly by going to war. In fact, war was incredibly lucrative. When Rome went to war in the East and took over many Greek cities, Rome came away with their wealth, cultural treasures, and slaves. Rome's imperial outlook made their economy strong for a very long time. 

Second, when we look at Germany after World War I, Germany suffered greatly from an economic point of view. Before the world, they were doing extremely well economically speaking (arguably the second biggest economy in the world), but after the war, things were in shambles. Germany was not allowed to import or export industrial goods. The Treaty of Versailles also stipulated that Germany had to pay huge sums in reparations to that Allies. German workers began to strike and the government printed more money. The upshot was serious hyperinflation. War crippled Germany's economy, and this discontent partially lead to World War II. 

In light of these two examples, there are many different economic outcomes of war.

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