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The hypothesis that military spending affects economic growth and other aspects of the economy has been under scrutiny over the last decades. However, the macroeconomic impact of defense outlays is still an open question for researchers and policymakers. Aiming to contribute to the existing debate, this paper combines Keynesian with monetary theory and develops a discrete-time model that allows for potential fiscal-monetary coordination for financing the military sector in order to examine the effects of defense outlays on income and inflation. Τhe theoretical analysis suggests that military budget expansions can only have temporary effects on income, as in the long run, their impact on the economy is solely inflationary. However, the empirical findings associated with the economy of Turkey are not fully consistent with the theoretical conclusions of the specified model.

The present paper aims to examine the effects of entry business regulation on the Foreign Direct Investment (FDI) inflows (net amount) of 185 countries covering a period from 2004 to 2017. For that reason, we estimate a dynamic panel FDI specification, which additionally checks for macroeconomic and institutional factors, using Fixed Effects, Bootstrap Fixed Effects and GMM estimators. Overall, the empirical findings reveal, a negative and statistically significant association between entry regulation and FDI. This suggests that bureaucratic burdens concerning entry regulation can exert adverse effects on the inflow of FDI. Furthermore, when the full sample is separated into different income groups, our findings still indicate evidence of significance, which, however, arises only in the countries of Low and Middle-income.

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