The Nexus of Economic Growth, Military Expenditures, and Income Inequality

Abstract

This paper examines the effect of military expenditures on economic growth by utilizing dynamic panel data analysis for 82 countries for the period of . Considering the possible effect of inequality on the military expenditures-economic growth nexus, this paper incorporates inequality along with its interaction with human capital into an augmented Solow growth model. The general finding is that military expenditures have a negative impact on economic growth, valid for several model specifications and sensitivity analyses. The negative impact holds when heterogeneity stemming from different country groups (e.g. development level, arms trade, fuel dependency) is considered. Also, the findings show that negative impact of military expenditure on growth for arms exporter and/or arms importer countries is weaker than those for other countries. Regarding income inequality and human capital, the findings suggest that human capital has a positive effect on growth, as expected. Income inequality on the other hand, has negative direct effect on economic growth. Considering these two variables together, the findings show that income inequality deteriorates growth for lower levels of human capital, whereas the impact of inequality on growth turns out to be positive for higher levels of human capital.

A Historical Analysis of The Economic Development of The USA (1947-2017)

“…With the help of panel regression methodology, it is determined that military expenditure has a negative effect on economic growth. Also, Dunne and Tian (2015), Pan et al (2015), Töngür and Elveren (2017), Yildirim and Öcal (2016) and Cappella Zielinski et al (2017) underlined the importance of the same issue in their studies. On the other side, there are also some studies which identified that government expenditure has a positive effect on economic growth (Adegoriola and Siyan, 2015;Aydın et al, 2016;Bunte et al, 2018;Rivero, 2017;Odhiambo, 2015).…”

Dampak Pengeluaran Militer, Investasi, Dan Pertumbuhan PDB Terhadap Kemiskinan Di Indonesia

“…Temuan ini berbeda dengan penelitian yang dilakukan Kalim & Hassan (2013) yang menemukan adanya kontribusi langsung dan signifikan pengeluaran militer terhadap kemiskinan di Pakistan. Selain itu, penelitian Töngür & Elveren (2015) mengungkapkan hubungan positif antara ketimpangan pendapatan dan persentase pengeluaran militer, yang menunjukkan bahwa belanja militer dapat menjadi faktor yang signifikan secara statistik yang mempengaruhi tingkat pengeluaran militer dan ketimpangan. Selain itu, penelitian Tongur juga menyoroti hubungan yang signifikan secara statistik antara kesejahteraan sosial demokrat dan rezim politik serta pengeluaran militer.…”

Effects of Defense Spending Changes on Economic Growth: A Nonlinear Cointegration Model and Asymmetric Causality Test for Turkey

“…Ayrıca, yüksek düzeydeki savunma harcamaları savunma sanayinde, diğer sektörlere yayılma potansiyeline sahip yeni bilgi ve teknolojilerin geliştirilmesini sağlamıştır. Daha sonra yapılan Ball (1983), Lipow and Antinori (1995), Akal et al, (2011), Dunne and Nikolaidou (2012), Ali and Ather (2015), Elveren (2016), Larrosa (2016), Töngür and Elveren (2017) gibi uygulamalı çalışmalarda savunma harcamalarının büyüme üzerindeki olumsuz etkilerine yönelik bulgular elde edilmiştir. Bu çalışmalar, askeri harcamalardaki artışın toplumsal ihtiyaçlar, eğitim, altyapı, sağlık gibi alanlara yönelik kaynakları azalttığını ve diğer sektörlerdeki özel yatırımları baskıladığını öne sürmektedir.…”