A note on the causal relationship between defence spending and growth in Greece: 1955–93

Kollias, Christos; Makrydakis, Stelios

doi:10.1080/10430710008404945

Cited by 31 publications

(8 citation statements)

References 30 publications

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“…There is much work which has been done on the relationship between military spending and other macroeconomic variables, such as economic growth (Chan, 1985;Chowdhury, 1991;Dunne, Smith & Willenbockel, 2005;Yildirim, Sezgin & Ocal, 2005;Kollias & Makrydakis, 2000), unemployment (Dunne & Smith, 1990;Abell, 1990Abell, , 1992Barker, Dunne & Smith, 1991;Hooker & Knetter, 1997;Yildirim & Sezgin, 2003), purchasing power parity (Bahmani-Oskooee & Goswami, 2005), black market premium (Bahmani-Oskooee & Goswami, 2006), poverty (Henderson, 1998), and investment (Smith, 1977).…”

Section: Literature Reviewmentioning

confidence: 99%

Military Spending and Inequality: Panel Granger Causality Test

Lin

Ali

2009

Journal of Peace Research

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The relationship between military spending and economic inequality is not well documented within the empirical literature, while numerous studies have uncovered the linkages between military spending and other macroeconomic variables, such as economic growth, unemployment, purchasing power parity, black market premium, poverty and investment. The purpose of this article is to examine the causal relationship between military spending and inequality using BVC and SIPRI data across 58 countries from 1987 to 1999. Panel unit root tests indicate that two inequality measures (Theil and EHII) under consideration are likely to be non-stationary. The authors' work addresses the adverse implications of modeling with non-stationary variables, since this omission casts serious doubt on the reliability of the relationship between military spending and inequality. The recent developed panel Granger non-causality tests provide no evidence to support the causal relationship in either direction between the military spending and the change in economic inequality. The results are consistently robust to alternative data sources for military spending, to alternative definitions of the inequality measures, to the log transformation of the military spending, to the deletion of some data points, and to the division of OECD and non-OECD countries. Finally, the impulse responses and variance decompositions based on the panel vector autoregressive regression model are consistent with the findings relied on Granger non-causality tests.

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Section: Literature Reviewmentioning

confidence: 99%

Military Spending and Inequality: Panel Granger Causality Test

Lin

Ali

2009

Journal of Peace Research

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“…There are two ways we can see the relationship between defense spending and economic growth: first, regression approach, where the direction of causality does not serious matter and second, time series approach, where the direction of causality does serious matter. A number of research papers have been concerned with the empirical relationship between defense spending and economic growth in different countries over different periods (see Hirnissa et al, 2008;Yildirim and Ocal, 2006;Yildirim et al, 2005;Reitschuler and Loening, 2005;Yildirim et al, 2005;Halicioglu, 2004;Kollias et al, 2004;Ocal, 2003;Shieh et al, 2002;Atesoglu, 2002;Dakurah et al, 2001;Dunne et al, 2001;Stroup and Heckelman, 2001;Frederiksen and McNab, 2001;Kollias and Makrydakis, 2000;Dunne and Vougas, 1999;Georgiou et al, 1996;Nadir, 1993;Chowdhury, 1991;Frederiksen, 1991;Alexander, 1990;Frederiksen and LaCivita, 1987;Looney and Frederiksen, 1986;Joerding, 1986). The empirical findings are, nevertheless, very contradictory.…”

Section: Introductionmentioning

confidence: 99%

Defense Spending and Economic Growth in China, India, Nepal and Pakistan: Evidence from Cointegrated Panel Analysis

Pradhan¹

2010

IJEF

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The study investigates the nexus between defense spending and economic growth in China, India, Nepal and Pakistan. The empirical analysis is based on integration and cointegration properties of data over the period [1988][1989][1990][1991][1992][1993][1994][1995][1996][1997][1998][1999][2000][2001][2002][2003][2004][2005][2006][2007]. The long run relationship between defense spending, economic growth and public debt are identified in a cointegration framework. The paper finds bidirectional causality between economic growth and public debt in China and India; unidirectional causality from defense spending to economic growth in China and Nepal, unidirectional causality from public debt to defense spending in India, and unidirectional causality from economic growth to public debt in Pakistan. The panel Granger causality test, however, confirms the presence of bidirectional causality between public debt and economic growth. The cointegration test at the end suggests that defense spending of a particular country can affect the defense spending of other country.

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“…The study concluded that defense expenditures for the South African economy had a statistically significant and quite negative impact on economic growth. Kollias and Makrydakis (2000) examined the relationship between defense expenditures and economic growth by using data between 1955 and 1993 for the Greek economy. They did not find any causal relationship between defense expenditures and economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

The Relationship Between Defense Expenditure and Economic Growth: A Panel Data Analysis for Turkey and Selected Countries

Polat¹

2020

Akademik Araştırmalar Ve Çalışmalar Dergisi (AKAD)

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In this study, the relationships between defense expenditure and economic growth are analyzed by panel data analysis methods by using the data of 1992-2017 periods for 15 countries with the highest defense spending in 2017. The stationarity of the series is examined by LLC and IPS panel unit root tests and the series are determined to be I(1). Cointegration relationships between series are examined by Pedroni panel cointegration test and it is determined that the series are cointegrated. Long and short-term analyzes are performed by PDOLS method, and 1% increase in defense expenditures is estimated to incline the national income by 1.05% in average, and this effect is slightly lower in the short term. Similarly; 1% increase in national income is found to ascend defense expenditure by 0.89% and this effect is also lower in the short term. Error correction mechanism of the models operates. Causality relationships between series is examined by VECM method and it is determined that a causality exists from national income to defense expenditures only in the long term while it exists both in the short term and in the long term from defense expenditure to national income.

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A note on the causal relationship between defence spending and growth in Greece: 1955–93

Cited by 31 publications

References 30 publications

Military Spending and Inequality: Panel Granger Causality Test

Military Spending and Inequality: Panel Granger Causality Test

Defense Spending and Economic Growth in China, India, Nepal and Pakistan: Evidence from Cointegrated Panel Analysis

The Relationship Between Defense Expenditure and Economic Growth: A Panel Data Analysis for Turkey and Selected Countries

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