US Military Expenditures and Economic Growth: Some Evidence from Spectral Methods
There is not much consensus on what the relationship is between military expenditures and economic growth. One argument is that military expenditures have a positive impact on growth because they are used as a fiscal policy too. The other hypothesis is that military expenditures have a negative impact on growth. Neither argument is consistent with the results reported here. This paper conducts a spectral analysis on the growth rates of real military and non-military US government expenditures and GDP from 1951-1997. The results suggest that, while non-military spending does move counter-cyclically with real GDP growth rates, military spending does not.
Volume (Year): 13 (2002)
Issue (Month): 1 ()
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Handbook of Macroeconomics,
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