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Military expenditure and unemployment in China

Author

Listed:
  • Qiong Li

    (Military Economy Academy)

  • Junhua Hu

    (Military Economy Academy)

Abstract

The sequential increase in China?s military expenditure has caused a worldwide debate. Aiming at one jurisdiction that the increase in military expenditure helps to stabilize the rising unemployment rate, and knowing the defense-unemployment nexus is barely researched in the context of China, this study manage to verify the validity of this jurisdiction and to plug the vacancy in China with empirical approaches using data from 1991 to 2013. After testing the time-series properties of the four variables (unemployment rate, military expenditure, non- military expenditure and GDP), the ARDL model is applied as the basis to our estimation. To our surprise, the military expenditure pushes up the unemployment rate, whereas the increase in its non-military counterpart presses down the rate. The results manifest that the jurisdiction is devoid of grounds, and, more notably, that the two parts of the China?s government spending boast opposite economic impact.

Suggested Citation

  • Qiong Li & Junhua Hu, 2015. "Military expenditure and unemployment in China," Proceedings of Economics and Finance Conferences 2204413, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:2204413
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    File URL: https://iises.net/proceedings/4th-economics-finance-conference-london/table-of-content/detail?cid=22&iid=032&rid=4413
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    Cited by:

    1. Ramesh CHANDRA DAS & Kamal RAY, 2019. "Long Run Relationships And Short Run Dynamics Among Unemployment And Demand Components: A Study On Sri Lanka, India And Bangladesh," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 107-120, June.

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