Defence spending and economic growth∗

Atesoglu, H. Sonmez; Mueller, Michael J.

doi:10.1080/10430719008404675

Cited by 115 publications

(51 citation statements)

References 3 publications

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“…Therefore, if C M and δ are positive, the effect of milexp on growth is expected to be positive. This model has been used by many; Alexander (1990), Atesoglu and Mueller (1990), Huang and Mintz (1991), (Ward and Davis, 1992), Cuaresma and Reitschuler (2004), among others. However suggest that there are important shortcoming of the model in terms of the interpretation of results as well as econometric techniques.…”

Section: The Three Approachesmentioning

confidence: 99%

Military expenditure and economic growth: A meta-analysis

Alptekin

Levine

2012

European Journal of Political Economy

207

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Meta analysis is conducted to review 32 empirical studies with 169 estimates to find the combined overall effect of military expenditure on economic growth. Using a meta fixed and random effects and regression analysis, our results show that there exists a "genuine" net effect of military expenditure on economic growth. The net combined effect is positive, and the magnitude is very small. The main sources of study-to-study variation in the findings of military expenditure and economic growth literature are attributable to the sample, time periods, and functional forms.JEL Classification: C42, H5, O11, 041, 047

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Section: The Three Approachesmentioning

confidence: 99%

Military expenditure and economic growth: A meta-analysis

Alptekin

Levine

2012

European Journal of Political Economy

207

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“…A study focussing on apartheid South Africa was undertaken by Roux (1996Roux ( , 2000, using a Keynesian aggregate production function model. Other,studies include McMillan (1992), and 1 These studies include among others Feder, 1982;Smith, 1980;Deger and Smith, 1983;Lim, 1983;Faini, et al, 1984;Biswas and Ram, 1986;Deger, 1986;Joerding, 1986;Ram, 1986;Rasler and Thompson, 1988;Atesoglu and Mueller, 1990;Alexander, 1990;Chowdhury, 1991;Huang and Mintz, 1991;Ward et al 1991;Chletsos and Kollias, 1995;Antonakis, 1997;Sezgin, 1997Sezgin, , 1999Sezgin, , 2000Sezgin, , 2001Heo, 1999;Murdoch et al, 1997;Sandler, 2002a, 2002b;Ozsoy, 2000;Yildirim and Sezgin, 2002;Aizenman and Glick, 2006;Cuaresma and Reitschuler, 2006;Drèze, 2006;Kalaitzidakis and Tzouvelekas, 2007;Kollias et al, 2007;Yakovlev, 2007;Habibullah et al, 2008;Kentor and Kick, 2008;Dunne and Uye, 2009;Hirnissa et al, 2009;Dunne and Smith, 2010 Batchelor et al (2000b). 2 McMillan (1992) examines the link using a Feder Ram model based on a neoclassical production function for the period 1950-1985.…”

Section: Military Expenditure and Economic Growthmentioning

confidence: 99%

Military expenditure, economic growth and structural instability: a case study of South Africa

Aye

Balcılar

Dunne

et al. 2014

Defence and Peace Economics

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This paper makes two contributions to the growing literature on the military expenditureeconomic growth nexus. It provides a case study of a developing country, South Africa, and considers the possibilities of structural breaks in the relationship, applying newly developed econometric methods. Taking annual data from 1951 to 2010 and full sample bootstrap Granger non-causality tests, initially we find no causal link between military expenditure and GDP. Then, using parameter instability tests, the estimated VARs are found to be unstable. However, when a bootstrap rolling window estimation procedure is used to deal with time variation in the parameters, bidirectional Granger causality between the two series becomes evident in various subsamples. While military expenditure has positive predictive power for GDP at certain initial periods, it has negative predictive power at some later periods in the sample. Similar results were obtained for the causality running from GDP to military expenditure. These findings illustrate that conclusions based on the standard Granger causality tests, which neither account for structural breaks nor time variation in the relationship may be invalid.

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“…However, others have found that reductions in defense spending might hurt the economy (Atesoglu and Mueller, 1990;Thomas et al, 1991;Mehay and Solnick, 1990), and many analysts have found no links between defense spending and economic growth (Kinsella, 1990;Gold and Adams, 1990;Dunne, 1990;Payne and Ross, 1992;Mintz, 1990, 1991;Gerace, 2002). Gerace (2002) sums up prevailing views well, observing that ''the net effect of military expenditures on economic growth is theoretically ambiguous'' (p. 2), and that ''there is no general consensus on whether military spending positively or negatively affects economic growth'' (p. 1).…”

Section: Military Spending and Economic Growthmentioning

confidence: 99%