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The Nexus between Military Expenditures and Economic Growth in the BRICS and the US: A Bootstrap Panel Causality Test

Author

Listed:
  • Ming Zhong

    (Shanghai University of Finance and Economics,School of Finance, Shanghai, CHINA)

  • Tsangyao Chang

    (Department of Finance, Feng Chia University Taichung, TAIWAN)

  • Samrat Goswami

    (Department of Rural Management and Development Tripura University, Tripura, INDIA)

  • Rangan Gupta

    (Department of Economics, University of Pretoria)

Abstract

This study re-examines the causal linkages between military expenditures and economic growth for the BRICS countries (Brazil, Russia, India, China, and South Africa) and that for the USA for the period 1988-2012. Panel causality was examined to explain dependency and heterogeneity across countries. The results of Granger causality tests show that military expenditures influence economic growth in the United States, economic growth influence military expenditures in both Brazil and India, a feedback between military expenditures and economic growth in Russia, and no causal link exists between military expenditures and economic growth in China and South Africa. These results indicate that the causality between military expenditures and economic growth varies across countries with different conditions. The findings of this study could provide important policy implications for the BRICS countries and also for the United States.

Suggested Citation

  • Ming Zhong & Tsangyao Chang & Samrat Goswami & Rangan Gupta, 2014. "The Nexus between Military Expenditures and Economic Growth in the BRICS and the US: A Bootstrap Panel Causality Test," Working Papers 201449, University of Pretoria, Department of Economics.
    • Handle: RePEc:pre:wpaper:201449
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    References listed on IDEAS

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    Cited by:

    1. Devi Prasad DASH & Debi Prasad BAL & Manoranjan SAHOO, 2016. "Nexus between defense expenditure and economic growth in BRIC economies: An empirical investigation," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(606), S), pages 89-102, Spring.
    2. çenberci, engin, 2020. "The Nexus Between Defense Spending and Growth: Empirical Analysis of First Euro Users," MPRA Paper 111273, University Library of Munich, Germany.

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    More about this item

    Keywords

    Military Expenditures; Economic Growth; Dependency and Heterogeneity; Bootstrap Panel Granger Causality Test; BRICS Countries;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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