Published in:IMF Working Paper, Vol. , pp. 1-40, 1995
Extent:
1 Online-Ressource (40 p)
Language:
English
DOI:
10.2139/ssrn.883201
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 1995 erstellt
Description:
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 quot;Peace Dividendquot;--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