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Military Expenditure and Economic Growth in Greece, 1960-90

Author

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  • Nicholas Antonakis

    (University of Athens & Ministry of Industry, Energy and Technology, Athens)

Abstract

There is much controversy in the literature over whether military expenditure is associated with higher or lower growth rates. Most studies on the subject utilize cross-sectional data, and the diversity in their conclusions is attributed mainly to sample variations and differences in the specificational choices and time periods examined. Moreover, to the extent that various regions of the world differ substantially in the natural environments they face and in socioeconomic structures, it is inappropriate to generalize the effects of military expenditure across countries. These facts point to the need for case-specific studies using time-series data for individual countries. In this context, the present article seeks to contribute to current research in the area by investigating the growth effects of military expenditure in the case of Greece over the post-war period. Basically, military expenditure can affect economic growth through both direct and indirect spin-offs, the reallocation of resources and the creation of new resources. Those influences can be captured by a simultaneous equation model comprising three equations, namely growth, savings and military burden. In the context of the general-to-specific approach, the estimation of this model for the Greek economy over the period 1960-90, reveals that the combined effect of military expenditure on the output growth rate is negative, independently of the level of significance used in calculating of the relevant multiplier.

Suggested Citation

  • Nicholas Antonakis, 1997. "Military Expenditure and Economic Growth in Greece, 1960-90," Journal of Peace Research, Peace Research Institute Oslo, vol. 34(1), pages 89-100, February.
    • Handle: RePEc:sae:joupea:v:34:y:1997:i:1:p:89-100
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    Cited by:

    1. Manamperi, Nimantha, 2016. "Does military expenditure hinder economic growth? Evidence from Greece and Turkey," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1171-1193.
    2. Sefa Awaworyi Churchill & Siew Ling Yew, 2018. "The effect of military expenditure on growth: an empirical synthesis," Empirical Economics, Springer, vol. 55(3), pages 1357-1387, November.
    3. Halicioglu Ferda, 2004. "Defense Spending and Economic Growth in Turkey: An Empirical Application of New Macroeconomic Theory," Review of Middle East Economics and Finance, De Gruyter, vol. 2(3), pages 34-43, December.
    4. ANDREOU, ANDREAS & PARSOPOULOS, KONSTANTINE & VRACHATIS, MICHAEL & Zombanakis, George A., 2003. "Optimal Versus Required Defence Spending," MPRA Paper 78663, University Library of Munich, Germany, revised 14 Jul 2003.
    5. Christos Kollias & Stelios Makrydakis, 2000. "A note on the causal relationship between defence spending and growth in Greece: 1955-93," Defence and Peace Economics, Taylor & Francis Journals, vol. 11(1), pages 173-184.
    6. Paresh Kumar Narayan & Russell Smyth, 2007. "The Military Expenditure-External Debt Nexus: New Evidence From A Panel Of Middle Eastern Countries," Monash Economics Working Papers 17-07, Monash University, Department of Economics.
    7. Garfinkel, Michelle R. & Skaperdas, Stergios (ed.), 2012. "The Oxford Handbook of the Economics of Peace and Conflict," OUP Catalogue, Oxford University Press, number 9780195392777.
    8. Julien Malizard, 2010. "Causality Between Economic Growth and Military Expenditure: The Case of France," Defense & Security Analysis, Taylor & Francis Journals, vol. 26(4), pages 401-413, December.
    9. Andreou, Andreas S. & Zombanakis, George, 2003. "The Greek-Turkish Arms Race Using Artificial Neural Networks," MPRA Paper 78576, University Library of Munich, Germany, revised 14 Jul 2003.
    10. Niklas Potrafke & Markus Reischmann, 2016. "How to Handle the Crisis in Greece? Empirical Evidence Based on a Survey of Economics Experts," CESifo Working Paper Series 5860, CESifo.

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