<P> The first nine months of war are characterized by expansion and strong inflationary pressure due to abnormally large consumption in anticipation of possible future shortages . The outbreak of the Korean War led to a sharp increase in consumer expenditure, as consumers hurried to buy automobile tires, sugar, nylons, etc. and in response to all the consumer purchases and in anticipation of war orders, manufacturers also began buying more raw materials . The spurt in sales lasted two months and then declined for several months as United Nations forces advanced northward in Korea . This was until there was a second buying wave in the winter of 1951, which followed the Chinese attacks along the Yalu River and United Nations forces retreated . </P> <P> On January 26, 1951, a price freeze was introduced . From the onset of the war to the start of the price freeze, prices increased at a rate of 11.1 percent annually . During the period from the price freeze to the end of price controls, prices rose at rate of 2.1 percent annually . Overall inflation increased by 5.3 percent . This inflation growth was much lower than that of World War II, during which wholesale prices increased about 70 percent . While money growth was very high and volatile during World War II, averaging 18 percent between 1940 and 1946, the average money growth rate during the Korean War was 4 percent . In response to this growth in inflation, the government implemented price and wage controls . Increases in taxes and new price and wage controls that constrained private sector consumption and investment affected overall material well - being . In the years after the war, consumption and investment continue to be impacted by war as they did not return to pre-war levels . </P> <P> While military spending in the US was high prior to the Korean War due to ongoing tensions with the Soviet Union, the Korean War further increased it . The Korean War cost the US $30 billion in 1953, which is equivalent to US $341 billion in 2011 . During the last year of the war, annual war expenditure comprised about 14.1 percent of GDP . Approximately 34,000 Americans were killed in battle and about another 2,800 died from disease or injury, with total US casualties, which includes dead, wounded, and missing in action, adding up to 139,860 . The "Korean War GI Bill" was implemented in 1952, eventually covering veterans between June 27, 1950 and February 1, 1955 . It offered the same benefits as the World War II G.I. Bill, including mustering - out pay, financial support for education, home and business loan guarantees, unemployment compensation, and job placement . </P>

What impact did the korean war have on u.s. military spending