MILITARY SPENDING AND ECONOMIC GROWTH IN SOUTH ASIA: A REPLY

We review some critical comments upon our earlier paper in this journal and respond to these. We also critically evaluate a proposed alternative methodology giving reasons why our own provides a more robust approach for examining the nexus between military spending and economic growth in South Asia.     

The evaluation of a possible future Sino-Japanese armed conflict through the application of the ACEI-model

There is relatively little formal modeling of the economic effects of armed conflicts even though they have substantial economic effects. We set forth a new model, namely the armed conflict economic impact model – ACEI-Model. The model looks at the economic effects of war in three different stages: (i) pre-conflict stage; (ii) armed conflict stage; and (iii) post-conflict stage. The model is based on economic desgrowth (-δ) and other new conceptual indicators. We evaluate an imaginary armed conflict between China and Japan by applying the ACEI-Model.     

A Cursed and Fragmented Island: History and Conflict Analysis in Bougainville,Papua New Guinea

This paper is a review piece examining the main factors responsible for the civil war, lasting from 1988 to 1998, on Bougainville island, an autonomous region in Papua New Guinea. History, economy, and social aspects of the island – especially traditional society features, mining activities, the effects of colonization and industrialization – are highlighted. The aim of the article is to identify which factors best explain the outbreak of the conflict. The main assumption is that no single factor can explain the civil war, as these elements require a comprehensive analysis. The ‘resource curse’ theory, i.e. the presence of natural resources leading to economic failure, and the existence of ethnic cleavages, are proposed as explanations, although further factors must also taken into account. Finally, the analysis helps to contextualize the unfolding events in Bougainville and its path to democratization.     

尾流自导鱼雷射击诸元解算模型研究

通过对舰船尾流和尾流自导鱼雷导引机制的研究,讨论了尾流自导鱼雷射击瞄点选择的依据和方法,分析原有模型的不足,建立了新的尾流自导鱼雷攻击解算模型。新模型修正了原有模型因简化和近似而造成的误差,使计算结果更加精确,并首次采用迭代的方法进行求解,通过实例验证了模型及解算方法的正确性。     

Military expenditures,economic growth and spatial spillovers

The relationship between economic growth and military expenditure has been the subject of a large literature in defence economics. This study analyses the influence of military expenditures on economic growth in a global perspective for the time period 2000–2010 taking spatial dimension into account. The augmented Solow model is employed to investigate the defence-growth nexus using the cross-sectional data relating to 128 countries. Following a traditional regression analysis, spatial variations in the relationships are examined utilizing different spatial econometric specifications estimated by maximum likelihood. The regressions are compared with each other via likelihood ratio tests, and the spatial Durbin model is found to be the most appropriate one suggesting that the typical least-squares model is misspecified. Empirical evidence indicates that military expenditure has a positive effect on economic growth with a significant spatial dependence for the time period under consideration.     

Defense–Growth Causality: Considerations of Regime-Switching and Time- and Country-Varying Effects

This paper develops a panel smooth transition vector autoregressive model to investigate the economic growth–defense causality. This model simultaneously resolves the estimation problems of endogeneity, heterogeneity, and nonlinearity. Empirical results support that the causality is bidirectional, nonlinear, time- and country-varying. Economic growth has a negative impact on military spending and vice versa. The larger the HDI, the smaller the negative causality. Evidently, the increase in the level of country development can reduce the negative impact of military outlays on economic growth. Reducing the ratio of military spending to GDP is beneficial for countries with low HDI scores; however, moderately increasing the share of military expenditure is favorable for countries with extremely high HDI scores. Policy authority needs to set optimal education, health, and economic development shares of GDP for purchasing a maximum economic growth rate.     

A single period model for a multiproduct perishable inventory system with economic substitution

This paper develops a single period model for a specific class of multiproduct perishable inventory systems where demands are interdependent. This class of inventory systems has the property that there is economic substitution between products. It is shown that the optimal policy has the economic substitution property, and that the rate of substitution is age dependent. The model serves as a generalization of a theorem discovered by Ignall and Veinott.     

A note on defence spending in turkey: New findings

The relationship between defence spending and economic growth has been examined extensively in recent years using the Feder (1983) model. These studies suffer from poor statistical results. In this paper, the earlier findings of Sezgin (1997), which used the Feder model are re‐estimated. Firstly, the stationarity of variables is tested. Due to the non‐stationarity of some variables, regressions are performed using first differences of variables. Secondly, lags are introduced into the Feder model. The statistical results are highly improved. Not only is a strong positive association between defence spending and economic growth found for Turkey, but also human capital is positively correlated to Turkish economic growth with a lag.     

Using the Feder-Ram and Military Keynesian Models to Examine the Link Between Defence Spending and Economic Growth in Sri Lanka

This study uses the Feder-Ram model in conjunction with the military Keynesian model to examine the nexus between defence spending and economic growth in Sri Lanka. We find that the Keynesian aggregate demand model is better suited to analyse the link than the Feder-Ram model for the case of Sri Lanka. Based upon our results we expect a higher economic growth rate in Sri Lanka if more public resources are diverted from the defence to civilian sectors of the economy, now that the war between the government and separatist guerrillas has come to an end. However, recent post war events cast doubt upon whether a diversion of sources from military to non-military spending will actually occur. We conclude that the sanguine predictions of our economic analysis are entirely dependent upon the political decisions of the Sri Lankan government for their realization.     

Defense spending and economic growth: evidence from China, 1952–2012

This paper examines whether defense expenditures contributed to economic growth in China for the 1952–2012 period. We examine the contribution of defense to economic growth using recently published official data on economic activity, defense, and government expenditures. We employ the Feder-Ram and augmented Solow models of economic growth to explore the defense-growth relationship. The Feder-Ram model appears to poorly explain economic growth in China. The augmented Solow model suggests, however, that a 1% increase in defense expenditures raises the economic growth rate by approximately 0.15–0.19%.     

The impact of military spending and income inequality on economic growth in Turkey

An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963–2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.     

Introduction: Symposium on defence economics

This study revisits the relationship between defence spending and economic growth via a Keynesian model in Pakistan using the autoregressive distributive lag bounds testing approach to cointegration. Empirical evidence suggests a stable cointegration relationship between defence spending and economic growth. An increase in defence spending reduces the pace of economic growth confirming the validity of Keynesian hypothesis in this case. Current economic growth is positively linked with economic growth of previous periods while a rise in non-military expenditures boosts economic growth. Interest rate is inversely associated with economic growth. Finally, unidirectional causality running from military spending to economic growth is found.     

A bayesian approach to evaluating military investments in product improvement and testing

Two issues of frequent importance in new product development are product improvement and reliability testing. A question often faced by the developer is: Should the product be distributed in its present state, or should it be improved further and/or tested before distribution? A more useful statement of the question might be: What levels of investment in further improvement and testing are economically permissible? Products for which this question is relevant may vary widely in type and intended use. This paper presents a model for determining these levels for one such product—an equipment modification procedure. The model presented makes use of present value analysis to compare cost streams and of Bayesian statistics to relate the costs to various outcomes under conditions of uncertainty. The model is applied to an actual military problem and a method is described for examining the sensitivity of the results to changes in the prior probabilities and discount rate.     

Country survey X: Defence spending in Turkey

This paper provides a country survey of the Turkish defence economy. Turkey is a member of NATO alliance and is strategically located between Europe and Middle East. Moreover, Turkey has a high defence burden and high economic growth. The first part of the survey presents a brief economic background of Turkey, its armed forces, the defence industry, its modernisation and trends in Turkish defence expenditure. The rest of the paper focuses on the relationships between defence spending and economic growth. The effect of defence spending on economic growth is econometrically estimated using a supply side model. Both externality effects and the size effect of defence spending are estimated for Turkey. The study concludes that defence expenditure stimulates economic growth while externalities from the defence sector to the rest of economy are negative for Turkey.     

Preserving defense technologies: A strategy for economic conversion†

This paper presents a model for converting legacy defense production facilities into private‐sector economic resources. Specifically, this paper will examine as a case study the first successful conversion of a former U.S. Department of Energy nuclear weapons production installation, including reasons for its success, its costs and benefits, and lessons for public policy. It is envisioned that this model may be useful for mitigating local economic hardship resulting from defense “downsizing” and for privatizing production capacities critical for national defense.     

Optimization of strategic defenses to provide specified post-attack production capacities

This paper presents a model for choosing a minimum-cost mix of strategic defenses to assure that specified production capacities for several economic sectors survive after a nuclear attack. The defender selects a mix of strategic defenses for each of several geographic regions. The attacker chooses an allocation of attacking weapons to geographic regions, within specified weapon inventories. The attack is optimized against any economic sector. This formulation allows the defense planner the capability to assess the results of the optimal defense structure for a “worst case” attack. The model is a mathematical program with nonlinear programming problems in the constraints; an example of its application is given and is solved using recently developed optimization techniques.     

Military spending and economic growth in South Africa

This paper undertakes an empirical analysis of the economic effects of military spending on the South African economy. It estimates a neo‐classical model common in the literature at the level of the macroeconomy and at the level of the manufacturing sector. An attempt is made to improve upon the model by allowing the data to determine the dynamic structure of the model through an ARDL procedure. No significant impact of military spending is found in aggregate, but there is a significant negative impact for the manufacturing sector. This suggests that the cuts in domestic military procurement that have occurred since 1989 could lead to improved economic performance in South Africa through their impact on the manufacturing sector.     

A visual search model: The waiting time distribution of the number of fixations until detection

Visual search is an important aspect of human tasks in industrial and military applications. Physically, a visual search process consists of a sequence of eye fixations. It has been hypothesized, based on search patterns found in early studies, that it is possible for fixations to follow both random and systematic patterns. Some early research works have been done in visual search. Analysis of human visual search involves examining experimental data and fitting the search time distribution. Some investigations have found that search times are described well by exponential distribution. This article discusses a visual search performance model based on derived search time distributions. The investigation of such a model is helpful in computing the probability of detecting a target, given a specified duration of search.     

自动喷水灭火系统成本效益分析

自动喷水灭火系统在我国一直存在质量不高、管理不当的现象，严重威胁人们的生命财产安全。产生这种现象的一个重要原因就在于投资者和业主不了解自动喷水灭火系统所能产生的经济效益，从而对设置该系统不够重视，甚至持反对的态度。针对这种情况，提出了一种定量评估设置自动喷水灭火系统的成本和效益的模型及具体计算方法，并结合工程实例验证了该模型的可行性。     

Some simple victory-prediction conditions for lanchester-type combat between two homogeneous forces with supporting fires

This paper develops new “simple” victory-prediction conditions for a linear Lanchester-type model of combat between two homogeneous forces with superimposed effects of supporting fires not subject to attrition. These simple victory-prediction conditions involve only the initial conditions of battle and certain assumptions about the nature of temporal variations in the attrition-rate coefficients. They are developed for a fixed-force-ratio-breakpoint battle by studying the force-ratio equation for the linear combat model. An important consideration is shown to be required for developing such simple victory-prediction conditions: victory is not guaranteed in a fixed-force-ratio-breakpoint battle even when the force ratio is always changing to the advantage of one of the combatants. One must specify additional conditions to hold for the cumulative fire effectivenesses of the primary weapon systems in order to develop correct victory-prediction conditions. The inadequacy of previous victory-prediction results is explained by examining (for the linear combat model without the supporting fires) new “exact” victory-prediction conditions, which show that even the range of possible battle outcomes may be significantly different for variable-coefficient and constant-coefficients models.