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Military Spending and Economic Growth: Evidence from Jordan

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  • Bassam AbuAl-Foul

Abstract

The purpose of this research is to investigate the causal relation between military spending and economic growth in one of the MENA countries, Jordan using annual data over the period 1988-2007. The methodology used in this study follows Toda and Yamamoto (1995) procedure in order to test the Granger causality between economic growth and military spending. The empirical results reveal that military spending Granger causes economic growth in Jordan. Thus, these findings lend support to the hypothesis that military spending positively affect economic growth through increasing aggregate demand.

Suggested Citation

  • Bassam AbuAl-Foul, "undated". "Military Spending and Economic Growth: Evidence from Jordan," Economics Working Papers 19-04/2014, School of Business Administration, American University of Sharjah.
    • Handle: RePEc:sha:ecowps:19-04/2014
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    References listed on IDEAS

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    Cited by:

    1. Abu-Ghunmi, Diana & Larkin, Charles, 2016. "The economic opportunity cost for countries located in crisis zones: Evidence from the Middle East," Research in International Business and Finance, Elsevier, vol. 36(C), pages 532-542.

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    More about this item

    Keywords

    Military spending; Economic growth; Jordan; Causality;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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