Αμυντικές δαπάνες και οικονομική μεγέθυνση
Military expenditures and economic growth
KeywordsΑμυντική βιομηχανία ; Αμυντικές δαπάνες ; Οικονομική μεγέθυνση ; Δεδομένα πάνελ ; Military expenditures ; Economic growth ; Panel data
The relationship between military expenditures and economic growth has received considerable attention from both scholars and policy-makers over the past few decades. Despite the existing arguments that suggest that defence spending either improves or forces down a country’s economic growth, empirical evidence in clear support of such arguments is far from conclusive. This is also the case regarding the existence of a long-run relationship between the two variables. This thesis examines the impact of military expenditures on economic growth on a large balanced panel of 71 countries over the period 1988–2014. Having found that military burden has a negative effect on growth in the short and medium run, the panel is broken down into various groupings based upon a range of potentially relevant factors and the robustness of the results is evaluated. The factors considered are different levels of income, conflict experience, geographic position, the Global Militarization Index (GMI), exporting of military equipment and NATO and OPEC membership. The estimates for the different groups are remarkably consistent with those for the whole panel, providing strong support for the argument that military spending has adverse effects on growth. There are, however, some intriguing results that suggest that for certain types of countries military spending has no significant effect on growth.