About this paper

The defence-growth nexus has been investigated by many studies and has always been a controversial area of research. By applying an Augmented Solow Growth Model integrated with a military burden variable, this paper examines the effect of military expenditure on economic growth for 21 OECD countries during the period 1960-2009. Different panel estimation methodologies are used to analyze the economic effects of military expenditure. The empirical results suggest that military expenditure would appear to have a negative effect on growth.

Reference

Hou N, Chen B. Military spending and economic growth in an augmented solow model: A panel data investigation for OECD countries[J]. Peace Economics, Peace Science and Public Policy, 2014, 20(3): 395-409.