Military Expenditure, Investment and Growth

John Dunne and Ronald Smith

Defence and Peace Economics, 2020, vol. 31, issue 6, 601-614

Abstract: This paper considers the issues involved in estimating the effect of military expenditure on growth and the reasons for the lack of consensus in the literature. It briefly reviews the economic theory, emphasising the difficult identification issues involved in determining the interaction between military expenditure and output and discusses econometric methods for panels. It then takes advantage of the extended SIPRI military spending to construct a relatively large balanced panel of countries for the period 1960–2014. Rather than the usual focus on the direct relation between military spending on growth, it focusses upon the investment channel. It provides estimates of various models examining the interaction between the three variables and finds that the data do not suggest any strong relations between military expenditure and either investment or growth. This is not unexpected given the theoretical and econometric problems identified.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://hdl.handle.net/10.1080/10242694.2019.1636182 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Military Expenditure, Investment and Growth (2019)
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:taf:defpea:v:31:y:2020:i:6:p:601-614

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GDPE20

DOI: 10.1080/10242694.2019.1636182

Access Statistics for this article

Defence and Peace Economics is currently edited by Professor Keith Hartley

More articles in Defence and Peace Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().