US Military Expenditures and Economic Growth: Some Evidence from Spectral Methods

Michael Gerace

Defence and Peace Economics, 2002, vol. 13, issue 1, 1-11

Abstract: There is not much consensus on what the relationship is between military expenditures and economic growth. One argument is that military expenditures have a positive impact on growth because they are used as a fiscal policy too. The other hypothesis is that military expenditures have a negative impact on growth. Neither argument is consistent with the results reported here. This paper conducts a spectral analysis on the growth rates of real military and non-military US government expenditures and GDP from 1951-1997. The results suggest that, while non-military spending does move counter-cyclically with real GDP growth rates, military spending does not.

Keywords: Military Expenditures; Economic Growth; Spectral Analysis; Fiscal Policy; Keynesianism (search for similar items in EconPapers)
Date: 2002
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DOI: 10.1080/10242690210966

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