Advanced Search
MyIDEAS: Login to save this article or follow this journal

Military spending and stochastic growth

Contents:

Author Info

  • Gong, Liutang
  • Zou, Heng-fu

Abstract

This study examines capital accumulation, military spending, arms accumulation, and output growth in a stochastic endogenous growth model. The analysis shows that higher (lower) growth in foreign military spending leads to faster (slower) economic growth in the home country if the home country¡¯s intertemporal substitution elasticity in consumption is smaller (larger); but more volatility in foreign military spending can lead to higher economic growth in the home country when its intertemporal substitution elasticity is large. In addition, shocks to output production may stimulate economic growth.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V85-472S22B-3/2/c4723cbbfa813396188e8b6ff9f7b256
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 28 (2003)
Issue (Month): 1 (October)
Pages: 153-170

as in new window
Handle: RePEc:eee:dyncon:v:28:y:2003:i:1:p:153-170

Contact details of provider:
Web page: http://www.elsevier.com/locate/jedc

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Grinols, Earl L. & Turnovsky, Stephen J., 1993. "Risk, the financial market, and macroeconomic equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 17(1-2), pages 1-36.
  2. Fershtman, C. & Murphy, K.M., 1993. "Social Status, Education and Growth," Papers 8-93, Tel Aviv.
  3. Zou, Heng-fu, 1994. "'The spirit of capitalism' and long-run growth," European Journal of Political Economy, Elsevier, vol. 10(2), pages 279-293, July.
  4. Landau, Daniel, 1993. "The economic impact of military expenditures," Policy Research Working Paper Series 1138, The World Bank.
  5. Fershtman, C. & Weiss, Y., 1991. "Social Status , Culture and Economic Performance," Papers 32-91, Tel Aviv.
  6. Stewart, Douglas B, 1991. "Economic Growth and the Defense Burden in Africa and Latin America: Simulations from a Dynamic Model," Economic Development and Cultural Change, University of Chicago Press, vol. 40(1), pages 189-207, October.
  7. Pindyck, Robert S. & Solimano, Andrés., 1993. "Economic instability and aggregate investment," Working papers 3552-93., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  8. Ploeg, F. van der & Zeeuw, A.J. de, 1987. "Perfect equilibrium in a model of competitive arms accumulation," Research Memorandum 266, Tilburg University, Faculty of Economics and Business Administration.
  9. Devereux, Michael B & Smith, Gregor W, 1994. "International Risk Sharing and Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 535-50, August.
  10. Eaton, Jonathan, 1981. "Fiscal Policy, Inflation and the Accumulation of Risky Capital," Review of Economic Studies, Wiley Blackwell, vol. 48(3), pages 435-45, July.
  11. Bertola, Giuseppe & Drazen, Allan, 1991. "Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity," CEPR Discussion Papers 599, C.E.P.R. Discussion Papers.
  12. Obstfeld, Maurice, 1994. "Risk-Taking, Global Diversification, and Growth," American Economic Review, American Economic Association, vol. 84(5), pages 1310-29, December.
  13. Intriligator, Michael D, 1975. "Strategic Considerations in the Richardson Model of Arms Races," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 339-53, April.
  14. Deger, Saadet & Sen, Somnath, 1995. "Military expenditure and developing countries," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 11, pages 275-307 Elsevier.
  15. Michael D. Intriligator & D. L. Brito, 1976. "Formal Models of Arms Races," Conflict Management and Peace Science, Peace Science Society (International), vol. 2(1), pages 77-88, February.
  16. Heng-fu Zou, 1995. "The spirit of capitalism and savings behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 28(1), pages 131-143, September.
  17. Harold L. Cole & George J. Mailath & Andrew Postlewaite, . ""Incorporating Concern for Relative Wealth into Economic Models''," CARESS Working Papres 95-14, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
  18. Gertler, Mark & Grinols, Earl, 1982. "Monetary randomness and investment," Journal of Monetary Economics, Elsevier, vol. 10(2), pages 239-258.
  19. Brito, D L, 1972. "A Dynamic Model of an Armaments Race," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(2), pages 359-75, June.
  20. Gurdip S. Bakshi & Zhiwu Chen, 1996. "The Spirit of Capitalism and Stock-Market Prices," CEMA Working Papers 511, China Economics and Management Academy, Central University of Finance and Economics.
  21. Turnovsky, Stephen J, 1993. "Macroeconomic Policies, Growth, and Welfare in a Stochastic Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(4), pages 953-81, November.
  22. Grinols, Earl L. & Turnovsky, Stephen J., 1994. "Exchange rate determination and asset prices in a stochastic small open economy," Journal of International Economics, Elsevier, vol. 36(1-2), pages 75-97, February.
  23. Simaan, M & Cruz, J B, Jr, 1975. "Formulation of Richardson's Model of Arms Race from a Differential Game Viewpoint," Review of Economic Studies, Wiley Blackwell, vol. 42(1), pages 67-77, January.
  24. Dumas, Bernard, 1989. "Two-Person Dynamic Equilibrium in the Capital Market," Review of Financial Studies, Society for Financial Studies, vol. 2(2), pages 157-88.
  25. Heng-Fu Zou, 1997. "Dynamic analysis in the Viner model of mercantilism," Journal of International Money and Finance, Elsevier, vol. 16(4), pages 637-651, August.
  26. Brito, Dagobert L. & Intriligator, Michael D., 1995. "Arms races and proliferation," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 6, pages 109-164 Elsevier.
  27. Benoit, Emile, 1978. "Growth and Defense in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 26(2), pages 271-80, January.
  28. Cole, Harold L & Mailath, George J & Postlewaite, Andrew, 1992. "Social Norms, Savings Behavior, and Growth," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1092-1125, December.
  29. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-51, December.
  30. Olivier Jean Blanchard, 1983. "Debt and the Current Account Deficit in Brazil," NBER Chapters, in: Financial Policies and the World Capital Market: The Problem of Latin American Countries, pages 187-198 National Bureau of Economic Research, Inc.
  31. Heng-fu Zou, 1995. "A dynamic model of capital and arms accumulation," CEMA Working Papers 80, China Economics and Management Academy, Central University of Finance and Economics.
  32. Deger, Saadet & Sen, Somnath, 1983. "Military expenditure, spin-off and economic development," Journal of Development Economics, Elsevier, vol. 13(1-2), pages 67-83.
  33. Ram, Rati, 1995. "Defense expenditure and economic growth," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 10, pages 251-274 Elsevier.
  34. Deger, Saadet & Sen, Somnath, 1984. "Optimal control and differential game models of military expenditure in less developed countries," Journal of Economic Dynamics and Control, Elsevier, vol. 7(2), pages 153-169, May.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. J Paul Dunne & Ron Smith & Dirk Willenbockel, 2004. "Models of Military Expenditure and Growth: A Critical Review," Working Papers 0408, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  2. Li, Anpeng, 2012. "Nuclear Arms Race and Environment," MPRA Paper 43883, University Library of Munich, Germany.
  3. Janmaat, John A & Ruijs, Arjan, 2006. "Investing in Arms to Secure Water," MPRA Paper 10667, University Library of Munich, Germany.
  4. Klaus Wälde, 2009. "Production Technologies in Stochastic Continuous Time Models," CESifo Working Paper Series 2831, CESifo Group Munich.
  5. Kwamie Dunbar, 2009. "Stochastic Business Cycle Volatilities, Capital Accumulation and Economic Growth: Lessons from the Global Credit Market Crisis," Working papers 2009-36, University of Connecticut, Department of Economics.
  6. Deng-Shan Wang & Yan Wang & Yifang Liu & Heng-fu Zou, 2009. "Optimal Military Spending, Trade and Stochastic Economic Growth," CEMA Working Papers 373, China Economics and Management Academy, Central University of Finance and Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:28:y:2003:i:1:p:153-170. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.