Military Spending and Growth: An Empirical Exploration of Contingent Relationships

MPRA Paper from University Library of Munich, Germany

Abstract: This analysis clarifies the ambiguous results from military spending and economic growth literature where the impact of military expenditure is frequently found to be non-significant or negative. Investigation re-examines effects of military spending on growth by analysing this relationship contingent on initial income per capita using recent advances in panel estimation methods and unique dataset on military expenditure. The findings reveal that while growth falls with higher levels of military spending, the marginal impact of military spending is increasing in initial income levels. In contrast to previous findings from the literature, this increase is consistent across different income groups and type of economies, and monotonic in direction going towards zero for sufficiently higher income level countries.

Keywords: Military expenditure; Economic Growth; Contingency (search for similar items in EconPapers)
JEL-codes: H56 O11 (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-pbe
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:59783

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