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Assessing the Effects of Military Expenditure on Growth

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Author Info

  • Giorgio d'Agostino

    (Università degli Studi di Roma and UWE, Bristol)

  • Luca Pieroni

    () (University of Perugia and UWE, Bristol)

  • J Paul Dunne

    () (University of the West of England and University of Cape Town)

Abstract

Military spending is an expenditure by governments that has influence beyond the resources it takes up, especially when it leads to or facilitates conflicts. This chapter provides an overview of the issues involved in analysing the effects of military spending on growth. It considers the alternative general economic theories that inform the development of models to undertake empirical analyses, and estimation issues in undertaking those analyses. The Feder-Ram model, the modified Solow and the endogenous growth models, are discussed in detail, before being estimated to illustrate the issues involved in estimating the models and to compare their performance.

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File URL: http://carecon.org.uk/DPs/1012.pdf
File Function: First version, 2010
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Bibliographic Info

Paper provided by University of the West of England, Department of Economics in its series Discussion Papers with number 1012.

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Length: 23 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:uwe:wpaper:1012

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Related research

Keywords: Military spending; growth; panels spending; semi-parametric estimation;

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References

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  1. Selami Sezgin, 1997. "Country survey X: Defence spending in Turkey," Defence and Peace Economics, Taylor and Francis Journals, vol. 8(4), pages 381-409.
  2. Suleiman Abu-Bader & Aamer Abu-Qarn, 2003. "Government Expenditures, Military Spending and Economic Growth: Causality Evidence from Egypt, Israel and Syria," Working Papers 163, Ben-Gurion University of the Negev, Department of Economics.
  3. Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2011. "Corruption, Military Spending and Growth," Discussion Papers 1103, University of the West of England, Department of Economics.
  4. Nikolaos Mylonidis, 2008. "Revisiting The Nexus Between Military Spending And Growth In The European Union," Defence and Peace Economics, Taylor and Francis Journals, vol. 19(4), pages 265-272.
  5. Pieroni, Luca & d'Agostino, Giorgio & Lorusso, Marco, 2008. "Can we declare military Keynesianism dead?," Journal of Policy Modeling, Elsevier, vol. 30(5), pages 675-691.
  6. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
  7. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  8. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
  9. Pavel Yakovlev, 2007. "Arms Trade, Military Spending, And Economic Growth," Defence and Peace Economics, Taylor and Francis Journals, vol. 18(4), pages 317-338.
  10. Julide Yildirim & Selami Sezgin & Nadir Ocal, 2005. "Military Expenditure And Economic Growth In Middle Eastern Countries: A Dynamic Panel Data Analysis," Defence and Peace Economics, Taylor and Francis Journals, vol. 16(4), pages 283-295.
  11. Peter Batchelor & J. Paul Dunne & David Saal, 2000. "Military spending and economic growth in South Africa," Defence and Peace Economics, Taylor and Francis Journals, vol. 11(4), pages 553-571.
  12. Luca Pieroni, 2007. "Military Spending and Economic Growth," Discussion Papers 0708, University of the West of England, Department of Economics.
  13. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  14. Biswas, Basudeb & Ram, Rati, 1986. "Military Expenditures and Economic Growth in Less Developed Countries: An Augmented Model and Further Evidence," Economic Development and Cultural Change, University of Chicago Press, vol. 34(2), pages 361-72, January.
  15. Reitschuler, Gerhard & Loening, Josef L., 2005. "Modeling the Defense-Growth Nexus in Guatemala," World Development, Elsevier, vol. 33(3), pages 513-526, March.
  16. Gupta, Sanjeev & de Mello, Luiz & Sharan, Raju, 2001. "Corruption and military spending," European Journal of Political Economy, Elsevier, vol. 17(4), pages 749-777, November.
  17. Kollias, Christos & Manolas, George & Paleologou, Suzanna-Maria, 2004. "Defence expenditure and economic growth in the European Union: A causality analysis," Journal of Policy Modeling, Elsevier, vol. 26(5), pages 553-569, July.
  18. Durmus Ozdemir & Ali Bayar, 2009. "The Peace Dividend Effect Of Turkish Convergence To The Eu: A Multi-Region Dynamic Cge Model Analysis For Greece And Turkey," Defence and Peace Economics, Taylor and Francis Journals, vol. 20(1), pages 69-78.
  19. Jurgen Brauer, 2002. "Survey and Review of the Defense Economics Literature on Greece and Turkey: What Have We Learned?," Defence and Peace Economics, Taylor and Francis Journals, vol. 13(2), pages 85-107.
  20. d'Agostino, G. & Dunne, J.P. & Pieroni, L., 2011. "Optimal military spending in the US: A time series analysis," Economic Modelling, Elsevier, vol. 28(3), pages 1068-1077, May.
  21. Shieh, Jhy-yuan & Lai, Ching-chong & Chang, Wen-ya, 2002. "The impact of military burden on long-run growth and welfare," Journal of Development Economics, Elsevier, vol. 68(2), pages 443-454, August.
  22. Jenn-Hong Tang & Cheng-Chung Lai & Eric Lin, 2009. "Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data," Defence and Peace Economics, Taylor and Francis Journals, vol. 20(4), pages 253-267.
  23. Jhy-Yuan Shieh & Wen-Ya Chang & Ching-Chong Lai, 2007. "An Endogenous Growth Model Of Capital And Arms Accumulation," Defence and Peace Economics, Taylor and Francis Journals, vol. 18(6), pages 557-575.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Are military expenses good for growth?
    by Economic Logician in Economic Logic on 2010-12-03 15:13:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. J Paul Dunne & Ron P. Smith, 2010. "Military Expenditure and Granger Causality: A Critical Review," Discussion Papers 1007, University of the West of England, Department of Economics.
  2. Muhammad, Shahbaz & Nuno, Carlos Leitão & Ghazi, Salah Uddin, 2012. "Should Portuguese Economy Invest in Defense Spending? A Revisit," MPRA Paper 42289, University Library of Munich, Germany, revised 26 Oct 2012.

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  1. Economic Logic blog

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