Data, Models, Coefficients: The Case of United States Military Expenditure
This article is an exercise in economic methodology. It replicates two published models of the effect of military expenditure on the United States economy but, in order to study variations in the relevant estimated parameters, applies two different military expenditure data sets to the models (budget vs. National Income and Product Accounts [NIPA] data). In an extension, the article examines coefficient stability when the economically preferred NIPA data are applied across varying time-periods. Two major findings are that economic models should avoid the use of budget data and that even when the preferred NIPA data are used, estimated parameters are highly unstable across time.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John B. Taylor, 2000. "Teaching Modern Macroeconomics at the Principles Level," American Economic Review, American Economic Association, vol. 90(2), pages 90-94, May.
- H. Sonmez Atesoglu, 2002. "Defense Spending Promotes Aggregate Output in the United States--Evidence from Cointegration Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(1), pages 55-60.
- Jesus Felipe & F. Gerard Adams, 2005.
""A Theory of Production" The Estimation of the Cobb-Douglas Function: A Retrospective View,"
Eastern Economic Journal,
Eastern Economic Association, vol. 31(3), pages 427-445, Summer.
- Jesus Felipe & F. Gerard Adams, 2004. ""A theory of production" the estimation of the Cobb-Douglas function: A retrospective view," CAMA Working Papers 2004-11, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Jurgen Brauer, 2002. "Survey and Review of the Defense Economics Literature on Greece and Turkey: What Have We Learned?," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(2), pages 85-107.
- Michael Brzoska, 1982. "Arms Transfer Data Sources," Journal of Conflict Resolution, Peace Science Society (International), vol. 26(1), pages 77-108, March.
- Stock, James H & Watson, Mark W, 1996. "Evidence on Structural Instability in Macroeconomic Time Series Relations," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(1), pages 11-30, January.
- James H. Stock & Mark W. Watson, 1994. "Evidence on Structural Instability in Macroeconomic Time Series Relations," NBER Technical Working Papers 0164, National Bureau of Economic Research, Inc.
- James H. Stock & Mark W. Watson, 1994. "Evidence on structural instability in macroeconomic times series relations," Working Paper Series, Macroeconomic Issues 94-13, Federal Reserve Bank of Chicago.
- J. Paul Dunne & Ron Smith & Dirk Willenbockel, 2005. "Models Of Military Expenditure And Growth: A Critical Review," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(6), pages 449-461.
- J Paul Dunne & Ron Smith & Dirk Willenbockel, 2004. "Models of Military Expenditure and Growth: A Critical Review," Working Papers 0408, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
- David H. Romer, 2000. "Keynesian Macroeconomics without the LM Curve," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 149-169, Spring.
- David Romer, 2000. "Keynesian Macroeconomics without the LM Curve," NBER Working Papers 7461, National Bureau of Economic Research, Inc.
- Ron P. Smith, 1998. "Quantitative Methods in Peace Research," Journal of Peace Research, Peace Research Institute Oslo, vol. 35(4), pages 419-427, July.
- Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, July. Full references (including those not matched with items on IDEAS)