The military expenditure – economic growth nexus revisited: evidence from the United Kingdom

Hanson, R. and Jeon, J. Y. ORCID: https://orcid.org/0000-0001-6855-1659 (2024) The military expenditure – economic growth nexus revisited: evidence from the United Kingdom. Peace Economics, Peace Science and Public Policy, 30 (2). pp. 207-248. ISSN 1554-8597 doi: 10.1515/peps-2023-0059

Abstract/Summary

The relationship between government defence expenditure and economic growth is a debated topic. This study uses UK data for the period of 1960-2012 and applies two of the most prevailing theories used within the literature, the ‘Feder-Ram’ and the ‘augmented Solow’ models, to assess this question. We utilise traditional model specifications, alongside extensively altered versions of both models, enabling a comprehensive comparison between them. The alterations to the models include re-evaluating how core variables are expressed, inclusion of measures of conflict, the impact of recession, etc. The results show that the augmented Solow model outperforms the Feder-Ram model, and we provide some explanations for this result. In addition, our results suggest that military expenditure has a positive effect on economic growth within the UK, implying that the decision to reduce defence spending may have been detrimental to the UK economy.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/116676
Identification Number/DOI	10.1515/peps-2023-0059
Refereed	Yes
Divisions	Arts, Humanities and Social Science > School of Politics, Economics and International Relations > Economics
Publisher	De Gruyter
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