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Data, Models, Coefficients: The Case of United States Military Expenditure


  • Jurgen Brauer

    (James M. Hull College of Business Augusta State University Augusta, Georgia, USA,


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.

Suggested Citation

  • Jurgen Brauer, 2007. "Data, Models, Coefficients: The Case of United States Military Expenditure," Conflict Management and Peace Science, Peace Science Society (International), vol. 24(1), pages 55-64, February.
  • Handle: RePEc:sae:compsc:v:24:y:2007:i:1:p:55-64

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    References listed on IDEAS

    1. John B. Taylor, 2000. "Teaching Modern Macroeconomics at the Principles Level," American Economic Review, American Economic Association, vol. 90(2), pages 90-94, May.
    2. 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.
    3. 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.
    4. 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.
    5. Michael Brzoska, 1982. "Arms Transfer Data Sources," Journal of Conflict Resolution, Peace Science Society (International), vol. 26(1), pages 77-108, March.
    6. 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.
    7. 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.
    8. David H. Romer, 2000. "Keynesian Macroeconomics without the LM Curve," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 149-169, Spring.
    9. Ron P. Smith, 1998. "Quantitative Methods in Peace Research," Journal of Peace Research, Peace Research Institute Oslo, vol. 35(4), pages 419-427, July.
    10. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, July.
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    Cited by:

    1. repec:bpj:pepspp:v:23:y:2017:i:2:p:14:n:5 is not listed on IDEAS
    2. Ali, Hamid E. & Lin, Eric S., 2010. "Wars, foodcost and countervailing policies: A panel data approach," Food Policy, Elsevier, vol. 35(5), pages 378-390, October.
    3. Eric S. Lin & Hamid E. Ali, 2009. "Military Spending and Inequality: Panel Granger Causality Test," Journal of Peace Research, Peace Research Institute Oslo, vol. 46(5), pages 671-685, September.
    4. Mauricio A. Rodríguez & Nancy A. Daza, 2012. "Determinants of Civil Conflict in Colombia: How Robust are they?," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(2), pages 109-131, April.
    5. Tilman Brück & Olaf J de Groot & Friedrich Schneider, 2011. "The economic costs of the German participation in the Afghanistan war," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(6), pages 793-805, November.
    6. W. Robert J. Alexander, 2015. "The Keynesian IS-MR Model and Military Spending," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(2), pages 213-221, April.
    7. H. Sonmez Atesoglu, 2009. "Defense Spending And Aggregate Output In The United States," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(1), pages 21-26.
    8. Malizard, Julien, 2015. "Does military expenditure crowd out private investment? A disaggregated perspective for the case of France," Economic Modelling, Elsevier, vol. 46(C), pages 44-52.


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