Citation

Cuaresma JC, Reitschuler G. Def. Peace Econ. 2004; 15(1): 71-82.

Copyright

(Copyright © 2004, Informa - Taylor and Francis Group)

DOI

10.1080/1024269042000164504

PMID

unavailable

Abstract

The defense-growth nexus is investigated empirically using time series data for the US and allowing the effect of defense spending on growth to be non-linear. Using recently developed econometric methods involving threshold regressions, evidence of a level-dependent effect of military expenditure on GDP growth is found: the positive externality effect of defense spending prevails for relatively lower levels of defense spending (with respect to the history of defense spending in the US) and reverts its influence for higher levels.