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Using the Feder-Ram and Military Keynesian Models to Examine the Link Between Defence Spending and Economic Growth in Sri Lanka

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  • Albert Wijeweera
  • Matthew J. Webb

Abstract

This study uses the Feder-Ram model in conjunction with the military Keynesian model to examine the nexus between defence spending and economic growth in Sri Lanka. We find that the Keynesian aggregate demand model is better suited to analyse the link than the Feder-Ram model for the case of Sri Lanka. Based upon our results we expect a higher economic growth rate in Sri Lanka if more public resources are diverted from the defence to civilian sectors of the economy, now that the war between the government and separatist guerrillas has come to an end. However, recent post war events cast doubt upon whether a diversion of sources from military to non-military spending will actually occur. We conclude that the sanguine predictions of our economic analysis are entirely dependent upon the political decisions of the Sri Lankan government for their realization.

Suggested Citation

  • Albert Wijeweera & Matthew J. Webb, 2012. "Using the Feder-Ram and Military Keynesian Models to Examine the Link Between Defence Spending and Economic Growth in Sri Lanka," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(3), pages 303-311, May.
    • Handle: RePEc:taf:defpea:v:23:y:2012:i:3:p:303-311
    DOI: 10.1080/10242694.2011.593352
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    2. W. Robert J. Alexander, 2015. "The Keynesian IS-MR Model and Military Spending," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(2), pages 213-221, April.
    3. Ran Tao & Oana Ramona Glonț & Zheng-Zheng Li & Oana Ramona Lobonț & Adina Alexandra Guzun, 2020. "New Evidence for Romania Regarding Dynamic Causality between Military Expenditure and Sustainable Economic Growth," Sustainability, MDPI, vol. 12(12), pages 1-13, June.

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