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Defence Spending and Economic Growth in the EU15

John Dunne and Eftychia Nikolaidou

No 1102, Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol

Abstract: Over the last 30 years there has been an impressive amount of empirical work on the defence-growth nexus, using different methodologies, models and econometric techniques and focusing on individual case studies, cross-country studies or panel data studies. Despite the number and the variety of studies, the evidence on the defence-growth relationship is still far from conclusive. Rather surprisingly, very limited work has been published in the relevant literature for the European Union despite the continuous discussions for a Common European Defence Policy that would require an assessment of the economic effects of defence in this region. To fill in the gap in the literature, this paper employs an augmented Solow-Swan model and estimates it both with panel and time series methods to provide empirical evidence on the economic effects of defence spending in the EU15 over the period 1961-2007. Overall, evidence derived from both panel and time series methods is consistent and suggests that military burden does not promote economic growth in this region.

Keywords: Defence Spending; Economic Growth; Panel data; time series; EU15 (search for similar items in EconPapers)
JEL-codes: H56 O40 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2011-03
New Economics Papers: this item is included in nep-eec and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://carecon.org.uk/DPs/1102.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: DEFENCE SPENDING AND ECONOMIC GROWTH IN THE EU15 (2012) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:uwe:wpaper:1102

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