Military Spending and Stochastic Growth: A Small Open Economy
In a stochastic endogenous growth model, the effects of military spending on economic growth are explored. In addition to the traditional crowding-out effect, we show that the portfolio effect also plays an importance role in determining growth rate in a small open economy. We find that there exists a non-linear relationship between the defense burden and the economic growth.
Volume (Year): 35 (2015)
Issue (Month): 4 ()
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