Economic impact of the ministry of defence’s budget: methodological design and results for the Spanish economy

García, José Renán; Murillo, Joaquim; Suriñach, Jordi; Vayá, Esther

doi:10.1080/10242694.2016.1158439

Cited by 3 publications

(1 citation statement)

References 18 publications

(17 reference statements)

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“…Daddi [27] investigate the impact of ME on GDP in Italy, the results showed that there is a military burden that has significant effects on GDP, promoting "peacekeeping" productivity and humanitarian missions that reduce insecurity from the external threat and implicitly of the investments and the jobs. García et al [28] analyze the influence of the allocation of the defense budget in Spain and its autonomous agencies and mention the effects of the cross-sectoral effects on the rest of the economy. The results show that the activity in the military sector and the activity of the agencies generated 1.2% of the GDP of the country and 1.7% of the total employment during 2010.…”

Section: Literature Reviewmentioning

confidence: 99%

New Evidence for Romania Regarding Dynamic Causality between Military Expenditure and Sustainable Economic Growth

Tao

Glonț

et al. 2020

Sustainability

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Military spending and sustainable economic development have been widely discussed in recent decades. Especially in Romania, the defense budget is valued at $4.8 billion, registering a compound annual growth rate (CAGR) of 23.57%. It is also expected to reach $7.6 billion in 2023, according to a report by Strategic Defense Intelligence. There is no consensus in current research and less attention is paid to Eastern European countries. Considering the significant increase in military spending in Romania in recent years, as well as the occurrence of political events, this paper focuses on the dynamic causal relationship between military spending and sustainable economic growth in Romania. The bootstrap rolling window causality test takes into account the structural changes, and therefore, provides more convincing results. The results indicate negative effects of military expenditure on sustainable economic growth between 1996–1999 and 2002–2004. It can be attributed to the crowding-out effect of public expenditure on private investment. The positive effect between the two variables analyzed is noticed with the accession of Romania to the North Atlantic Treaty Organization. Conversely, it is found that economic growth does not have a significant effect on military spending in Romania. Policymakers should guard against the crowding out of private consumption and investment due to excessive military spending and ensure to increase military expenditure on the premise of sustainable economic development.

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Section: Literature Reviewmentioning

confidence: 99%