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US Military Expenditures and Economic Growth: Some Evidence from Spectral Methods

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  • Michael Gerace

Abstract

There is not much consensus on what the relationship is between military expenditures and economic growth. One argument is that military expenditures have a positive impact on growth because they are used as a fiscal policy too. The other hypothesis is that military expenditures have a negative impact on growth. Neither argument is consistent with the results reported here. This paper conducts a spectral analysis on the growth rates of real military and non-military US government expenditures and GDP from 1951-1997. The results suggest that, while non-military spending does move counter-cyclically with real GDP growth rates, military spending does not.

Suggested Citation

  • Michael Gerace, 2002. "US Military Expenditures and Economic Growth: Some Evidence from Spectral Methods," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(1), pages 1-11.
    • Handle: RePEc:taf:defpea:v:13:y:2002:i:1:p:1-11
    DOI: 10.1080/10242690210966
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    References listed on IDEAS

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