Defense Expenditures, Economic Growth, and the “Peace Dividend”

Mintz, Alex; Huang, Chí

doi:10.2307/1963264

Cited by 167 publications

(70 citation statements)

References 27 publications

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“…For Asia and Latin America, Murdoch et al (1997) found that defense expenditures positively affect economic growth. Many other studies have also found positive relationship between defense expenditures and economic growth (Lipow and Antinori, 1995;Ward and Davis 1992;Mintz and Huang, 1990;Deger, 1986;Deger and Smith, 1983).…”

Section: Defense Spending Affects Economic Growth Positivelymentioning

confidence: 87%

The Impact of Military Expenditures on Economic Growth of Pakistan

Ajmair¹,

Hussain²,

Abbassi³

et al. 2018

AEF

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The purpose of this research paper is to examine the long run relationship between military expenditure, number of persons in military and economic growth. To fulfill this, the study used ARDL approach for annual time series data from 1990 to 2015. The results show that Pakistan military expenditures are insignificant (military burden for the country is statically insignificant) and number of persons in military are positively and significantly related with GDP growth in long run. The error correction term is negative and significant which shows that short run relationship exists among economic growth, military expenditures and number of army persons. In short run military expenditure and number of persons in military are positively and significantly related with GDP growth but in long run only number of military persons affects economic growth positively and significantly.

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Section: Defense Spending Affects Economic Growth Positivelymentioning

confidence: 87%

The Impact of Military Expenditures on Economic Growth of Pakistan

Ajmair¹,

Hussain²,

Abbassi³

et al. 2018

AEF

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“…Negative effects of military expenditure on economic growth were found when alternative channels were investigated like through reducing the savings rate, crowding out investment in new capital stock, health and education and increasing tax burden with greater impact on resource restraint countries (see e.g. Smith, 1980;Cappelen et al, 1984;Mintz and Huang (1990), Huang and Mintz (1991), and Ward and Davis (1992), Batchelor et al, 2000;Dunne et al, 2001). Finally, there is another group of studies that imply that there is no relationship between the two variables mainly when the military expenditures are low (see e.g.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As Mintz and Stevenson (1995) first argued, the diversity of results is mainly as a result of the use of alternative channels of interaction between the two magnitudes and the research methodology. On that front, there are studies that focus on one country (e.g.…”

Section: Literature Reviewmentioning

confidence: 99%

“…The studies that used time series models have also problems with low power of estimation as the data time span was rather small. The first study to avoid these problems and utilize panel data was by Mintz and Stevenson (1995) who found that military expenditure leads to positive economic growth in less than 10% of the 103 countries in their sample. However, only a small volume of the recent literature has been using panel data: Ram (2003) used a sample of 119 countries, Yildirim et al (2005) focused on Middle Eastern countries, Kollias et al (2007) investigated 15 EU members, Chang et al (2011) utilized a dataset of 90 countries, Chen et al (2014) analyzed 137 countries.…”

Section: Literature Reviewmentioning

confidence: 99%

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Investigating the Dynamic Interaction between Military Spending and Economic Growth

Desli

Gkoulgkoutsika

Katrakilidis

2016

Review Development Economics

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The relationship and interaction of military spending and economic growth have been theoretically and empirically investigated since the 1970s but it still cannot provide conclusive evidence towards the direction and the quantification of the impact between the two magnitudes. The use of different data sets in terms of time periods, and number and geographic location of countries, different theoretical background leading to different econometric specifications, and single type of econometric methodology, make any comparison impossible. This paper looks into the dynamic interaction between military spending and economic growth during the period 1988–2013 that includes the recent years of economic crisis covering 138 countries without making any prior assumptions about the theoretical channels of influence, while not limited to a single estimation method but employing a wide range of methodologies in order to form a complete picture of the long‐ and short‐run interaction. Furthermore, as such interaction might not be linear, we create three groups of countries based on the countries' income developmental stage. Overall we find no evidence of long‐ and short‐run causality from the military spending to economic growth except for the developing countries (positive in the long run). However, from economic growth to military spending we find a positive impact for all groups except the least developed countries. We also notice the interaction was more prominent prior to the start of the economic crisis.

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“…Benoit seemed to find a positive effect of the share of military expenditure on growth, but subsequent works failed to confirm this relationship across the world. The large subsequent literature does not seem to indicate any robust empirical regularity, with the exception of cases such as the EU (Kollias et al 2004); former USSR states (McDonald and Eger 2010); and the USA (Mueller and Atesoglu 1993;Atesoglu 2002), whether positive or negative as noted by Mintz and Stevenson (1995). Separately from the defense literature listed above, there also has been a revival of interest among economists in the determinants of growth prompted by the availability of the international data sets.…”

Section: Defense Expenditure and Economic Growthmentioning

confidence: 99%

Arms build‐up and arms race in optimal economic growth

Larrosa¹

2016

Int J of Economic Theory

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I analyze a model of strategic interdependence between two economies linked by investments in defensive capital for deterrence purposes. I adapt a two‐agent dynamic setting where weapon production affects consumption. Individually both economies determine their balanced growth path by taking this interdependence into account in different grades of awareness. I associate two types of equilibria with internal or external determinants for defense production analogous to scenarios of arms build‐up or arms race. I find that a defense sector is compatible with economic growth but a tight arms race can harm growth.

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Defense Expenditures, Economic Growth, and the “Peace Dividend”

Cited by 167 publications

References 27 publications

The Impact of Military Expenditures on Economic Growth of Pakistan

The Impact of Military Expenditures on Economic Growth of Pakistan

Investigating the Dynamic Interaction between Military Spending and Economic Growth

Arms build‐up and arms race in optimal economic growth

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