Asymmetric Effect of Military Expenditures on Economic Growth in Pakistan: A Nonlinear-ARDL Approach

Abstract

The nexus between military expenditure and economic growth has been analyzed using different methods and techniques in the economic growth literature, but most previous findings are indecisive, i.e., non-significant, positive, or negative. The primary purpose of this article was to explain the military expenditure-economic growth nexus in Pakistan by capturing the asymmetrical effects of military expenditures on economic growth using the non-linear autoregressive distribution lag-NARDL technique. Data were analyzed from 1972-2018. The results indicated that a decrease in military spending (adverse shocks) enhanced economic growth in the long term. An increase in military spending (positive shocks) had an insignificant effect on economic growth in Pakistan, suggesting that a focus on cost reduction in military expenditure may benefit economic growth. More so, the Wald test validated the asymmetries both in the long- and short term. Capital formation and labor force, as a control variable, positively affected economic growth in the long run. Based on these findings, the paper offers some critical suggestions for policymakers.

Does resource efficiency matter for environmental quality in Canada?

“…CO2, RESEF, LGDP, LPEC, and LFD variables. As mentioned by Lanrui et al (2022), Khan et al (2021), andSarwar et al (2020), using linear estimators is likely to lead to biased outcomes. Therefore, the present study employed a nonlinear ARDL estimator in order to capture the effect of resource efficiency on the quality of the environment in the case of Canada.…”