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The Relationship between Defense Spending and Inflation

Author

Listed:
  • Harvey Starr
  • Francis W. Hoole
  • Jeffrey A. Hart

    (Department of Political Science, Indiana University)

  • John R. Freeman

    (Department of Political Science, Massachusetts Institute of Technology)

Abstract

The relationship between defense spending and inflation has been of interest to scholars and policymakers throughout much of the post-World War II era. Yet there is no agreement as to the exact nature of the relationship. We attempt to shed some light on this matter by identifying the alternative conceptualizations of the relationship between defense spending and inflation that appear in the literature and subjecting them to empirical examination using data for the 1956-1979 era from four major Western powers. No significant relationship between defense spending and inflation is discovered in the cases of the United States and the United Kingdom, whereas defense spending and inflation are found to be mutually related in the cases of France and the Federal Republic of Germany.

Suggested Citation

  • Harvey Starr & Francis W. Hoole & Jeffrey A. Hart & John R. Freeman, 1984. "The Relationship between Defense Spending and Inflation," Journal of Conflict Resolution, Peace Science Society (International), vol. 28(1), pages 103-122, March.
    • Handle: RePEc:sae:jocore:v:28:y:1984:i:1:p:103-122
    DOI: 10.1177/0022002784028001006
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    References listed on IDEAS

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    Cited by:

    1. Glismann, Hans H. & Horn, Ernst-Jürgen & Schrader, Klaus, 1993. "Wohlfahrtseffekte von Rüstungs- und Raumfahrtausgaben: Das Beispiel der Vereinigten Staaten," Open Access Publications from Kiel Institute for the World Economy 783, Kiel Institute for the World Economy (IfW Kiel).
    2. Shin-Jen Tzeng & Ching-Chong Lai & Chun-Chieh Huang, 2008. "Does Military Expenditure Matter For Inflation And Economic Growth?," Defence and Peace Economics, Taylor & Francis Journals, vol. 19(6), pages 471-478.
    3. Michael A. Akume & Gylych Jelilov & Benedict Akanegbu, 2019. "The Impact of Military Spending on Economic Wellbeing in Nigeria," International Journal of Business, Economics and Management, Conscientia Beam, vol. 6(4), pages 186-200.

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