Correlation of military expenditures and economic growth: lessons for Romania

Oana Ramona Lobont (), Oana Ramona Glont (), Leonardo Badea and Sorana Vatavu ()
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Oana Ramona Lobont: West University of Timisoara
Oana Ramona Glont: West University of Timisoara Romania
Sorana Vatavu: West University of Timisoara

Quality & Quantity: International Journal of Methodology, 2019, vol. 53, issue 6, No 14, 2957-2968

Abstract: Abstract This paper examines the correlation between public policies in the field of military expenditures and economic growth in Romania. The research is built upon the vast literature focused on the field of public policies and economic growth. Whereas economic growth became one of the most dynamic areas in economics, this correlation will consider the determinants of the real sector development through economic phenomenon modeling. The impact of military expenditures on growth is analysed for Romania, using annual data over the period 1991–2016. The research methodology employed is the Granger causality test. The empirical results reveal that there is a bidirectional relationship between military expenditure and GDP over the long run, with a positive effect described by both relationships through several models exemplified in the analysis. From the economic point of view, these results highlight the impact of military expenditures, generating different positive effects on labor, capital, economic growth and efficient use of resources in the economic sector, at the national level.

Keywords: Military expenditures; Economic growth; Granger causality test; Romania (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s11135-019-00910-9

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