Military expenditure and economic growth: peru 1970-1996
AbstractThe present study examines the effects of military expenditure on growth in Peru in the period from 1970 to 1996. By using a Deger-type Simultaneous Equations Model it is possible to break up the net effect into supply- and demand-side influences. The former consist of positive externalities of defence activities on the other sectors of the economy, while the latter can be described as crowding-out of civilian investment. Estimations find the supply-side effects to be insignificantly different from zero, while the crowding-out effect of defence spending is significant and substantial. It is thereby established that defence expenditure has a negative overall effect on economic growth in Peru. Although several caveats - including specification problems of the Deger model, the quality of the data used, a relatively small sample and the presence of autocorrelation in the estimations - must be considered, these results turn out to be quite robust with respect to estimation methods (3SLS, 2SLS, OLS) and slight modifications to the model. They are also consistent with previous empirical findings from other countries and cross sectional studies.
Download InfoIf 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.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Defence and Peace Economics.
Volume (Year): 15 (2004)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.tandfonline.com/GDPE20
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.:
- Deger, Saadet & Sen, Somnath, 1983. "Military expenditure, spin-off and economic development," Journal of Development Economics, Elsevier, vol. 13(1-2), pages 67-83.
- Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x.
- Paul Dunne & Eftychia Nikolaidou & Andre Roux, 2000. "Defence spending and economic growth in South Africa: A supply and demand model," Defence and Peace Economics, Taylor & Francis Journals, vol. 11(4), pages 573-585.
- Muhammad, Shahbaz & Nuno, Carlos Leitão & Ghazi, Salah Uddin, 2012.
"Should Portuguese Economy Invest in Defense Spending? A Revisit,"
42289, University Library of Munich, Germany, revised 26 Oct 2012.
- Shahbaz, Muhammad & Leitão, Nuno Carlos & Uddin, Gazi Salah & Arouri, Mohamed & Teulon, Frédéric, 2013. "Should Portuguese economy invest in defense spending? A revisit," Economic Modelling, Elsevier, vol. 35(C), pages 805-815.
- Ageli, Mohammed Moosa & Zaidan, Shatha Mousa, 2012. "Consequential Effects of Defence Expenditure on Economic Growth of Saudi Arabia: 1970-2012," MPRA Paper 46590, University Library of Munich, Germany.
- Ucal, Meltem & Karabulut, Gokhan & Bilgin, Mehmet Huseyin, 2009. "Military Expenditures and Inequality: Empirical Evidence from Israel," MPRA Paper 48643, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.