The Peace Dividend: Military Spending Cuts and Economic Growth
40 Pages Posted: 15 Feb 2006
There are 2 versions of this paper
The Peace Dividend: Military Spending Cuts and Economic Growth
Date Written: May 1995
Abstract
Although conventional wisdom suggests that reducing military spending may improve a country`s economic growth performance, empirical studies have produced ambiguous results. This paper extends a standard growth model and estimates it using techniques that exploit both cross-section and time-series dimensions of available data to obtain consistent estimates of the growth-retarding effects of military spending via its adverse impact on capital formation and resource allocation. Model simulations suggest that a substantial long-run "Peace Dividend"--in the form of higher capacity output--may result from: (i) markedly lower military expenditure levels achieved in most regions during the late 1980s; and (ii) further military spending cuts that would be possible in the future if a global peace could be secured.
JEL Classification: 041, 047
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Losers and Winners in Economic Growth
By Robert J. Barro and Jong-wha Lee
-
The Peace Dividend: Military Spending Cuts and Economic Growth
By Malcolm Knight, Norman Loayza, ...
-
Military Expenditures 1972-1990: The Reasons Behind the Post-1985 Fall in World Military Spending
-
Commerce, Markets, and Peace: Richard Cobden's Enduring Lessons
-
Whats the Point of a Development Strategy?
By Amartya Sen