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Revisiting The Nexus Between Military Spending And Growth In The European Union

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  • Nikolaos Mylonidis

Abstract

This paper focuses on the influence of military spending on European economic growth. The estimated regressions are based on Barro's (1991) growth model, which controls for economic institutional variation across countries. The cross-section and panel data analyses cover the period 1960-2000. The empirical findings indicate that military spending has an overall net negative influence on economic growth. Furthermore, the magnitude of this negative impact tends to increase over time, as cross-section regression results indicate. Given the development of a Common European Security and Defence Policy (CESDP), these findings suggest that enhanced defence spending may hinder European economic growth.

Suggested Citation

  • Nikolaos Mylonidis, 2008. "Revisiting The Nexus Between Military Spending And Growth In The European Union," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(4), pages 265-272.
  • Handle: RePEc:taf:defpea:v:19:y:2008:i:4:p:265-272
    DOI: 10.1080/10242690802164801
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tsangyao Chang & Chien-Chiang Lee & Hsiao-Ping Chu, 2015. "Revisiting the Defense-Growth nexus in European countries," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(3), pages 341-356, June.
    2. Christos Kollias & Suzanna-Maria Paleologou, 2010. "Growth, investment and military expenditure in the European Union-15," Journal of Economic Studies, Emerald Group Publishing, vol. 37(2), pages 228-240, May.
    3. Sakiru Adebola Solarin, 2016. "Sources of labour productivity: a panel investigation of the role of military expenditure," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(2), pages 849-865, March.
    4. Fiaz Hussain & Shahzad Hussain & Naila Erum, 2015. "Are Defense Expenditures Pro Poor or Anti Poor in Pakistan? An Empirical Investigation," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 875-894.
    5. Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2010. "Assessing the Effects of Military Expenditure on Growth," Working Papers 1012, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    6. Chang, Hsin-Chen & Huang, Bwo-Nung & Yang, Chin Wei, 2011. "Military expenditure and economic growth across different groups: A dynamic panel Granger-causality approach," Economic Modelling, Elsevier, vol. 28(6), pages 2416-2423.
    7. Abdul Jalil & Hafiz Khuram Nadeem Abbasi & Nazia Bibi, 2016. "Military expenditures and economic growth: allowing structural breaks in time series analysis in the case of India and Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(4), pages 1487-1505, July.
    8. Christos Kollias & Suzanna-Maria Paleologou, 2016. "Investment, growth, and defense expenditure in the EU15: Revisiting the nexus using SIPRI’s new consistent dataset," Economics of Peace and Security Journal, EPS Publishing, vol. 11(2), pages 28-37, October.
    9. Kollias, Christos & Paleologou, Suzanna-Maria, 2013. "Guns, highways and economic growth in the United States," Economic Modelling, Elsevier, vol. 30(C), pages 449-455.
    10. repec:exl:25engi:v:27:y:2016:i:3:p:246-252 is not listed on IDEAS
    11. Julien Malizard, 2016. "Military expenditure and economic growth in the European Union: Evidence from SIPRI’s extended dataset," Economics of Peace and Security Journal, EPS Publishing, vol. 11(2), pages 38-44, October.
    12. Muhammad Shahbaz & Talat Afza & Muhammad Shahbaz Shabbir, 2013. "Does Defence Spending Impede Economic Growth? Cointegration And Causality Analysis For Pakistan," Defence and Peace Economics, Taylor & Francis Journals, vol. 24(2), pages 105-120, April.
    13. Chen, Pei-Fen & Lee, Chien-Chiang & Chiu, Yi-Bin, 2014. "The nexus between defense expenditure and economic growth: New global evidence," Economic Modelling, Elsevier, vol. 36(C), pages 474-483.
    14. Manuel Acosta & Daniel Coronado & Rosario Marin, 2011. "Potential Dual-Use Of Military Technology: Does Citing Patents Shed Light On This Process?," Defence and Peace Economics, Taylor & Francis Journals, vol. 22(3), pages 335-349.
    15. Andrés Navarro-Galera & Francisco Muñoz-Leyva & Rodrigo Iván Ortúzar Maturana & Juan Lara Rubio, 2014. "Factors influencing the modernization of military-investment economic appraisal systems," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(6), pages 577-604, December.
    16. repec:taf:defpea:v:28:y:2017:i:6:p:719-730 is not listed on IDEAS

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