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Military Expenditure and Economic Growth: The South American Case

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  • Riveros Gavilanes, John Michael

Abstract

The present article establishes an empirical approximation related to the influence of the military expenditure in the economic growth for the case of the countries of South America. The main theoretical framework is based in the approximation of the Augmented Solow model considering the effect of the share of military spending in the factor productivity as it was proposed by Knight et al. (1996). The methodology follows the estimation of a panel vector autoregressive model for the period of 1977-2016, considering all the variables as endogenous, within this, it is provided the Granger-causality tests among the equations. The results determinate that military expenditure is not statistically significant to explain the variation in the output of the economy, meanwhile it existed a causality relation between the savings of the economy and the military expenditure for this continent.

Suggested Citation

  • Riveros Gavilanes, John Michael, 2020. "Military Expenditure and Economic Growth: The South American Case," MPRA Paper 98508, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:98508
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    References listed on IDEAS

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    More about this item

    Keywords

    E23; E22; E60; F43; O54;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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