Citation

Zhao L, Zhao L, Chen BF. Def. Peace Econ. 2017; 28(6): 703-718.

Copyright

(Copyright © 2017, Informa - Taylor and Francis Group)

DOI

10.1080/10242694.2015.1111603

PMID

unavailable

Abstract

This study examines the relationship between defence spending, other components of public spending and economic growth for the 1952-2012 period in China using Granger causality tests and generalised impulse response functions based on vector error correction models. The empirical results reveal two long-run equilibrium relationships among the variables and also show that defence spending inversely and unidirectionally Granger impacts economic growth. Furthermore, empirical findings point to a trade-off relationship between defence spending and public expenditures in China. From a policy maker's perspective, the findings reported herein imply that a decrease in defence spending may stimulate economic growth.

Language: en