Defense Spending and Income Inequality: New Evidence from Greece

Antonis Tsitouras () and Nicholas Tsounis ()
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Antonis Tsitouras: University of Western Macedonia
Nicholas Tsounis: University of Western Macedonia

Chapter Chapter 3 in Advances in Applied Macroeconomics, 2025, pp 41-58 from Springer

Abstract: Abstract This study utilizes contemporary econometric techniques to investigate the correlation between income inequality and military expenditure in Greece. While there have been many studies on various aspects of military expenditure in Greece, none have specifically investigated the influence of military spending on income distribution. Therefore, our substantial contribution to the existing empirical research is essential and has the potential to offer significant policy recommendations. The results of our study suggest that, in the short term, an increase in defense spending is associated with an increase in income inequality. Nevertheless, the results indicate that persistent military expenditure diminishes income inequality in Greece in the long run. In addition, our findings validate the Kuznets hypothesis when examining our short and long-run results regarding the relationship between income per capita growth and income disparity. Finally, the research findings regarding the influence of secondary education on income inequality suggest that it has a persistent detrimental impact over time, while population growth leads to an increase in income inequality.

Keywords: Income inequality; GINI; ARDL; Defense spending (search for similar items in EconPapers)
JEL-codes: C22 D30 H56 O11 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-76658-9_3

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DOI: 10.1007/978-3-031-76658-9_3

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