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Military Expenditures, External Threats and Economic Growth

Author

Listed:
  • Ari Francisco de Araujo Junior

    (Ibmec Minas)

  • Cláudio D. Shikida

    (Ibmec Minas)

Abstract

Do military expenditures have impact on growth? Aizenman & Glick (2006) found that this impact is positive in countries with good governance, where the external threat is significant. Our article shows that their results suffer from three limitations: (i) they are not robust to the most recent main database used (ii) small changes in the time period of some variables change their results, and (iii) the authors' econometric specification is not adequate to their hypothesis. Using a 2SLS specification we reconfirm the authors'' hypothesis.

Suggested Citation

  • Ari Francisco de Araujo Junior & Cláudio D. Shikida, 2008. "Military Expenditures, External Threats and Economic Growth," Economics Bulletin, AccessEcon, vol. 15(16), pages 1-7.
    • Handle: RePEc:ebl:ecbull:eb-08o10019
    as

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    File URL: http://www.accessecon.com/pubs/EB/2008/Volume15/EB-08O10019A.pdf
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    References listed on IDEAS

    as
    1. Joshua Aizenman & Reuven Glick, 2006. "Military expenditure, threats, and growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 15(2), pages 129-155.
    2. Alchian, Armen A. & Demsetz, Harold, 1973. "The Property Right Paradigm," The Journal of Economic History, Cambridge University Press, vol. 33(1), pages 16-27, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Albert J.F. Yang & William N. Trumbull & Chin Wei Yang & Bwo‐Nung Huang, 2011. "On The Relationship Between Military Expenditure, Threat, And Economic Growth: A Nonlinear Approach," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(4), pages 449-457, April.
    2. Mie Augier & Robert McNab & Jerry Guo & Phillip Karber, 2017. "Defense spending and economic growth: evidence from China, 1952–2012," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(1), pages 65-90, January.
    3. Muhammed Umar Aminu & Muhammed Umar Aminu & Abu Sufian Abu Bakar, 2016. "The Interactional Impact of Defense Expenditure and Arms Importation on Economic Growth in Nigeria: An Autoregressive Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 6(2), pages 538-543.

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    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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