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Defence expenditure and economic growth in Latin American countries: evidence from linear and nonlinear causality tests

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  • Christos Kollias

    () (University of Thessaly)

  • Suzanna-Maria Paleologou

    (Aristotle Univesrity of Thessaloniki)

  • Panayiotis Tzeremes

    (University of Thessaly)

  • Nickolaos Tzeremes

    (University of Thessaly)

Abstract

Abstract Using SIPRI’s new consistent database on military expenditures, the paper examines the economic effects of such spending in the case of the 13 Latin American countries. Employing both linear and nonlinear tests, the nexus between defence spending, economic growth, and investment is investigated for the period 1961–2014. Findings reported herein are not uniformed across all countries included in the sample. However, as a broad tentative generalization, they seem to be pointing to the absence of a strong and robust nexus between the variables examined.

Suggested Citation

  • Christos Kollias & Suzanna-Maria Paleologou & Panayiotis Tzeremes & Nickolaos Tzeremes, 2017. "Defence expenditure and economic growth in Latin American countries: evidence from linear and nonlinear causality tests," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 26(1), pages 1-25, December.
  • Handle: RePEc:spr:laecrv:v:26:y:2017:i:1:d:10.1007_s40503-017-0039-4
    DOI: 10.1007/s40503-017-0039-4
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    References listed on IDEAS

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    Keywords

    Latin America; Military spending; Growth; Causality;

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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