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By contrast, overlooking internal and external security to maximize net outputs of some productive sectors could also make the economy’s flow unstable.Therefore, an empirical investigation is needed to draw a calculation.
Moreover, the idea that it crowd out private investment is not obvious.
In recent time there are some studies have taken place in South Asia which obtained positive growth effect. 2013) got unidirectional causality from military spending to economic growth for Pakistan using the autoregressive distributive lag bounds testing approach to Cointegration.
Firstly, we tested the unit root of our variables using ADF test (Augmented Dickey Fuller).
Secondly, to investigate the long-run relationship between GDP growth and military expenditure we used Engle-Ganger Cointegration test.
To justify the contribution of military expenditure, researchers have been working for under developed, developing, and developed countries.
From the beginning, this kind of studies is more precise for the countries that have achieved their sovereignty from the neighbor countries and the countries who have political consent with other countries (Farzanegan 2014).Their study obtained a strong, positive unidirectional causality running from military expenditures to economic growth. (2005) examined the effect of military spending on economic growth in a panel of Middle Eastern countries and Turkey.Their study employed a dynamic panel data (1989–1999) estimation method and found positive growth effects of military expenditure.So the aim of this study is to justify the relationship between military expenditure and economic growth for three neighbor countries that have to maintain a great amount of military budget as they are geographically correlated with one another.As military expenditure is an integral part of government expenditure researchers around the world were much curious to investigate the contribution of the military spending in the economy and this curiosity will be continued.To justify the relationship of military expenditure and economic growth for 65 countries from 1975 to 2004 (Dicle and Dicle 2010) run the causality approach and finally they obtained bidirectional positive causality between the variables in 54 of the 65 countries. 2001) proved that in 23 countries there is a unidirectional causality from military expenditure to economic growth or vice versa and bidirectional causality in 7 countries.Abu-qarn (2010) in 2010 studied the Arab Arab-Israel conflict but he did not find any persistent adverse impact of military expenditures on economic growth. (2011) investigated the relationship of the military spending-growth for the case of North Cyprus from 1977 to 2007.Atesoglu (2002) also used a Cointegration analysis for united states and gained positive and quantitative effect of military expenditure on economic growth. 2004b) examined the relationship between military expenditure and economic growth applying causality approach and acquired bi-directional causality between military spending and growth from 1964 to 1999. 2004a) observed the relationship between military spending and economic growth among EU 15 countries using Cointegration analysis and causality test for the period of 1961–2000, almost all cases they got positive causality from economic growth to military spending and not vice-versa.They also concluded that the EU countries decide the military expenditure considering their economic status.From the beginning period to this present period many researchers have done their research and got some valuable findings that ultimately enriched the field of peace economy.A number of researchers got positive relationship between military expenditure and economic growth.