Does Military Spending Matter for Long Run Growth?

Giorgio d'Agostino, John Dunne and Luca Pieroni

No 2017-03, School of Economics Macroeconomic Discussion Paper Series from School of Economics, University of Cape Town

Abstract: The effects of military spending has on the economy continues to be a subject of considerable debate, with a lack of consensus in the literature. This paper takes advantage of the SIPRI extended dataset to contribute to the debate using empirical methods made available, or more applicable, by the extra observations. It constructs a large panel of countries for the period 1970-2014 to explore the long-run equilibrium relationship between military spending and economic growth, applies the more flexible Pooled Mean Group (PMG) estimator, and to compare the results with the more restrictive Dynamic Fixed Effect (DFE) method used in earlier influential studies. It also compares results from different time and country samples. Across the specifications it finds a significant and persistent negative effect of military burden on economic growth that is robust across different country groups, with the largest impact being for OECD countries.

Date: 2017
New Economics Papers: this item is included in nep-dcm and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (44)

Downloads: (external link)
https://docs.google.com/viewer?a=v&pid=sites&srcid ... NmIzOTE1ZTYwM2MxYmMw Full text (application/pdf)

Related works:
Journal Article: Does Military Spending Matter for Long-run Growth? (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ctn:dpaper:2017-03

Access Statistics for this paper

More papers in School of Economics Macroeconomic Discussion Paper Series from School of Economics, University of Cape Town Contact information at EDIRC.
Bibliographic data for series maintained by Kevin Kotze ().