Military Expenditures, External Threats and Economic Growth

Ari Francisco de Araujo Junior () and Claudio Djissey Shikida ()
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Ari Francisco de Araujo Junior: Ibmec Minas

Economics Bulletin, 2008, vol. 15, issue 16, pages 1-7

Abstract: Do military expenditures have impact on growth? Aizenman & Glick (2006) found that this impact is positive in countries with good governance, where the external threat is significant. Our article shows that their results suffer from three limitations: (i) they are not robust to the most recent main database used; (ii) small changes in the time period of some variables change their results, and (iii) the authors’ econometric specification is not adequate to their hypothesis. Using a 2SLS specification we reconfirm the authors' hypothesis.

Keywords: economic growth; military expenditures; external threats; simultaneity (search for similar items in EconPapers)
JEL-codes: O1 (search for similar items in EconPapers)
Date: 2008-09-16
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