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Military expenditure and economic growth, 1960–2014

Author

Listed:
  • J. Paul Dunne

    (School of Economics and the Southern Africa Labour and Development Research Unit, University of Cape Town, South Africa)

  • Nan Tian

    (Southern Africa Labour and Development Research Unit, University of Cape Town, South Africa)

Abstract

This article compares results of our 2015 study of the effect of military expenditure on economic growth, 1988–2010, with results using an additional 28 years of data provided in the newly revised and extended SIPRI dataset, 1960–2014. When the additional data points are added, we find no substantive differences and confirm the statistically significant negative effect of military expenditure on growth reported in our prior research. Using the same estimation process, there is no evidence of a structural break in the time series. Considering nonlinearity and heterogeneity, the estimates using the new data for ninety-seven countries are remarkably consistent with the earlier results and, overall, are very similar in sign and statistical significance, and many of the coefficients are larger (more adverse) than before. The new data provide valuable extra information and support for the original findings.

Suggested Citation

  • J. Paul Dunne & Nan Tian, 2016. "Military expenditure and economic growth, 1960–2014," Economics of Peace and Security Journal, EPS Publishing, vol. 11(2), pages 50-56, October.
    • Handle: RePEc:epc:journl:v:11:y:2016:i:2:p:50-56
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    References listed on IDEAS

    as
    1. Ram, Rati, 1995. "Defense expenditure and economic growth," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 10, pages 251-274, Elsevier.
    2. W. Robert J. Alexander, 2013. "Military Spending And Economic Growth In South Asia: Comment And Reconsideration," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(2), pages 173-178, April.
    3. Sandler,Todd & Hartley,Keith, 1995. "The Economics of Defense," Cambridge Books, Cambridge University Press, number 9780521447287, January.
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    Keywords

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    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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