Does military spending affect inequality in South Africa? A revisit

Joel Eita (), Mduduzi Biyase, Thomas Udimal and Talent Zwane
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Thomas Udimal: Southwest Forestry University
Talent Zwane: College of Business and Economics, University of Johannesburg

Economics Working Papers from College of Business and Economics, University of Johannesburg, South Africa

Abstract: Previous investigations on military spending-inequality nexus (in South Africa) were underpinned by the assumption that military spending and inequality behaves in symmetric fashion and employed linear autoregressive distributed lag (ARDL) model in their analysis. This paper extends and improve upon prior studies by investigating the short-run and long-run asymmetric effect of military spending on South Africa's income inequality. Using annual data from 1980 to 2017 and asymmetric autoregressive distributed lag (NARDL) model by Shin et al. (2014), our paper revisits the military spending-income inequality nexus. We find evidence to suggest an asymmetric association between military and income inequality - income inequality responds differently to positive and negative shocks of military spending in the long- and short-run. Based on these findings, we are inclined to conclude that the NARDL model delivers more accurate estimates and provides nuanced insights that the traditional linear ARDL.

Keywords: inequality; military spending; ARD; NARDL (search for similar items in EconPapers)
JEL-codes: C22 H56 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2022, Revised 2022
New Economics Papers: this item is included in nep-his
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Journal Article: Does military spending affect inequality in South Africa? A revisit (2024)
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