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Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data

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  • Jenn-Hong Tang
  • Cheng-Chung Lai
  • Eric Lin

Abstract

This paper investigates the empirical relationships between military expenditure and unemployment rates. A set of global panel data on 46 countries is utilized, and a panel data version of the Granger causality test is applied. The results indicate that there is little evidence of the causality running from unemployment to military expenditure regardless of how we measure military spending and determine group countries. In contrast, the causality running from military expenditure to unemployment receives empirical support if military expenditure is measured in terms of its share of GDP and if data are taken from middle- and low-income countries or non-OECD countries.

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  • Jenn-Hong Tang & Cheng-Chung Lai & Eric Lin, 2009. "Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 253-267.
    • Handle: RePEc:taf:defpea:v:20:y:2009:i:4:p:253-267
    DOI: 10.1080/10242690903105257
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    References listed on IDEAS

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    1. John D. Abell, 1992. "Defense Spending and Unemployment Rates:," American Journal of Economics and Sociology, Wiley Blackwell, vol. 51(1), pages 27-42, January.
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    Cited by:

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    2. Garfinkel, Michelle R. & Skaperdas, Stergios (ed.), 2012. "The Oxford Handbook of the Economics of Peace and Conflict," OUP Catalogue, Oxford University Press, number 9780195392777, Decembrie.
    3. Julien Malizard, 2014. "Defense Spending and Unemployment in France," Defence and Peace Economics, Taylor & Francis Journals, vol. 25(6), pages 635-642, December.
    4. Feng-Li Lin & Mei-Chih Wang, 2019. "Does economic growth cause military expenditure to go up? Using MF-VAR model," Quality & Quantity: International Journal of Methodology, Springer, vol. 53(6), pages 3097-3117, November.
    5. Michael Chletsos & Stelios Roupakias, 2017. "Defense Spending and Unemployment. Evidence from Southern European Countries," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 23(1), pages 1-36, January.
    6. Suna Korkmaz, 2015. "The Effect of Military Spending on Economic Growth and Unemployment in Mediterranean Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 5(1), pages 273-280.
    7. Kollias Christos & Paleologou Suzanna-Maria & Tzeremes Panayiotis, 2020. "Defence Spending and Unemployment in the USA: Disaggregated Analysis by Gender and Age Groups," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 26(2), pages 1-13, May.
    8. Giorgio d'Agostino & Luca Pieroni & J Paul Dunne, 2010. "Assessing the Effects of Military Expenditure on Growth," Working Papers 1012, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
    9. J Paul Dunne, 2011. "Military Keynesianism: An Assessment," Working Papers 1106, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
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    11. Muhammad Azam & Faisal Khan & Khalid Zaman & Amran Md. Rasli, 2016. "Military Expenditures and Unemployment Nexus for Selected South Asian Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1103-1117, July.
    12. Qing Deng & Mengjiao Yao & Hui Zhang & Feng Yu & Lida Huang & Yaping Ma, 2024. "Constructing a cross-field scenario system to aware systemic risk: national security as an example," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 120(2), pages 1899-1923, January.
    13. Brian J. Phillips, 2015. "Civil war, spillover and neighbors’ military spending," Conflict Management and Peace Science, Peace Science Society (International), vol. 32(4), pages 425-442, September.
    14. Alper Aslan, 2012. "The Relationship Between Military Spending and Black Market Premium in Greece: An ARDL Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(2), pages 155-161, November.
    15. Hanif, Abu & Salah Uddin, Muhammad & Bakirtas, Tahsin & Kader, Sheikh Abdul, 2023. "Military Expenditure and Unemployment Nexus in Bangladesh," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 15(1), pages 157-184, January.

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