Guns versus Growth: Assessing the Validity of the Benoit Hypothesis on the Egyptian Economy

Mona Rabea Abd Elfattah Elsayed
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Mona Rabea Abd Elfattah Elsayed: Department of Economics, Faculty of Commerce, Mansoura University, Mansoura, Egypt

International Journal of Economics and Financial Issues, 2024, vol. 14, issue 5, 71-80

Abstract: In the early 1970s, Emile Benoit introduced the concept of positive correlations between military expenditure rates and economic growth rates in less developed countries (LDCs), igniting interest among development economists. This study evaluates the Benoit hypothesis in the context of the Egyptian economy from 1971 to 2022. Using the Autoregressive Distributed Lag (ARDL) model and the Toda-Yamamoto causality test, we examine the complex dynamics of the, highlighting economic prosperity's influence on defense budgets. However, the absence military spending and economic growth relationship in Egypt. Our findings challenge conventional expectations, revealing intricate short-term and long-term economic interactions. The Toda-Yamamoto test indicates a one-way causal relationship from economic growth to military spendingof a clear reciprocal causal link underscores the relationship's complexity, influenced by factors like resource allocation and temporal lags in the economic impact of military expenditures.

Keywords: Military Expenditure; Economic Growth; Benoit Hypothesis; Autoregressive Distributed Lag; Toda-Yamamoto Causality Test (search for similar items in EconPapers)
JEL-codes: C22 H50 H56 (search for similar items in EconPapers)
Date: 2024
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