MILITARY EXPENDITURE AND UNEMPLOYMENT RATES: GRANGER CAUSALITY TESTS USING GLOBAL PANEL DATA

Jenn-Hong Tang, Cheng-Chung Lai and Eric Lin

Defence and Peace Economics, 2009, vol. 20, issue 4, 253-267

Abstract: This paper investigates the empirical relationships between military expenditure and unemployment rates. A set of global panel data on 46 countries is utilized, and a panel data version of the Granger causality test is applied. The results indicate that there is little evidence of the causality running from unemployment to military expenditure regardless of how we measure military spending and determine group countries. In contrast, the causality running from military expenditure to unemployment receives empirical support if military expenditure is measured in terms of its share of GDP and if data are taken from middle- and low-income countries or non-OECD countries.

Keywords: Military spending; Unemployment; Panel Granger causality (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (14)

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DOI: 10.1080/10242690903105257

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