ON THE RELATIONSHIP BETWEEN MILITARY EXPENDITURE,THREAT, AND ECONOMIC GROWTH: A NONLINEAR APPROACH |
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| Authors: | Albert J.F. Yang William N. Trumbull Chin Wei Yang |
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| Affiliation: | 1. Department of Marketing/Distribution Management , National Kaohsiung First University of Science &2. Technology , Taiwan;3. Department of Economics, College of Business and Economics , West Virginia University , PO Box 6025, Morgantown, WV, 26506-6025, USA;4. Department of Economics , Clarion University of Pennsylvani , Clarion, PA, 16214-1232, USA;5. Department of Economics , National Chung Cheng University , Chia‐Yi 621, Taiwan |
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| Abstract: | The main objective of the paper is to decipher the military expenditure–economic growth relationship, taking the level of economic development (income) into consideration. Our findings suggest the following: (i) military expenditure has a significantly negative relationship to economic growth for the 23 countries with initial incomes (threshold variable) less than or equal to $475.93; (ii) when the threat level is heightened, economic growth (23 countries) is expected to decrease. However, military expenditure in the presence of sufficiently large threats increases growth; (iii) for the remaining 69 countries whose initial incomes (real GDP per capita in 1992 price) exceed $475.93, no significant relationship exists whether the threat variable is taken into consideration or not. |
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| Keywords: | Military expenditure Economic growth Threat Threshold |
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