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Military Keynesianism: An Assessment

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  • J Paul Dunne

    (University of the West of England and University of Cape Town)

Abstract

The recent recession has seen something of resurgence in the debate over military Keynesianism. Recent commentators who should no better have claimed that it would make sense to stimulate the US economy through increases in military spending, as though this has not been a commonly contested view over the last 40 years. A large literature has debated the economic effects of military spending and while it has reached no consensus, there is also little support for any belief that military spending is a good way of stimulating the economy. This paper makes a contribution to the debate by assessing the theoretical perspectives and the empirical approaches used. It then undertakes an analysis of the US using a number of approaches and the results suggest that the simple Military Keynesian arguments still lack empirical support.

Suggested Citation

  • J Paul Dunne, 2011. "Military Keynesianism: An Assessment," Working Papers 1106, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  • Handle: RePEc:uwe:wpaper:1106
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    File URL: http://carecon.org.uk/DPs/1106.pdf
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    References listed on IDEAS

    as
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    7. Pivetti, Massimo, 1992. "Military Spending as a Burden on Growth: An 'Underconsumptionist' Critique," Cambridge Journal of Economics, Oxford University Press, vol. 16(4), pages 373-384, December.
    8. J Paul Dunne & Fanny Coulomb, 2008. "Peace, War and International Security: Economic Theories," Working Papers 0803, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
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    10. Luca Pieroni, 2009. "Military Expenditure And Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 327-339.
    11. M. Hashem Pesaran & Ron P. Smith, 1998. "Structural Analysis of Cointegrating VARs," Journal of Economic Surveys, Wiley Blackwell, vol. 12(5), pages 471-505, December.
    12. J Paul Dunne & Ron P. Smith, 2010. "Military Expenditure and Granger Causality: A Critical Review," Working Papers 1007, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    13. 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.
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    More about this item

    Keywords

    Military Spending; economic growth; VAR; CVAR;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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