Do military expenditures have impact on growth? Aizenman & Glick (2006) found that this impact is positive in countries with good governance, where the external threat is significant. Our article shows that their results suffer from three limitations: (i) they are not robust to the most recent main database used; (ii) small changes in the time period of some variables change their results, and (iii) the authors’ econometric specification is not adequate to their hypothesis. Using a 2SLS specification we reconfirm the authors' hypothesis.
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Article provided by Economics Bulletin in its journal Economics Bulletin.
Find related papers by JEL classification: O1 - Economic Development, Technological Change, and Growth - - Economic Development
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