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Defence Spending and Economic Growth in the Visegrad Countries

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  • Grzegorz Waszkiewicz

Abstract

This paper aims to consider the impact of military outlays on economic stance in several states in Central Europe. Therefore, we attempted to search the long- and short-range causality between defence spending and economic growth in the Visegrad countries through analysing general values (total spending approach), as well as outlay distribution in the defence sector (spending division approach). To do so, we first presented the theoretical aspect of the problem, as well as the trends in military spending of the considered states since 1993. Second, we reviewed international results of empirical examinations in this area. Then we examined causalities among variables on the grounds of VAR methodology. We did not validate the long-term causality between defence spending and economic growth in the Visegrad countries. Nonetheless, we confirmed several short-term relationships in both empirical approaches. JEL: E62, H60, F52, C22. Keywords: Military expenditure, Distribution, Economic development, Causality, Cointegration.

Suggested Citation

  • Grzegorz Waszkiewicz, 2020. "Defence Spending and Economic Growth in the Visegrad Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 67(4), pages 539-556.
    • Handle: RePEc:voj:journl:v:67:y:2020:i:4:p:539-556:id:672
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    More about this item

    Keywords

    Military expenditure; Distribution; Economic development; Causality; Cointegration;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • F52 - International Economics - - International Relations, National Security, and International Political Economy - - - National Security; Economic Nationalism
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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