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Military expenditures and economic growth: allowing structural breaks in time series analysis in the case of India and Pakistan

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Abstract

This paper investigates the long run relationship between military expenditures and economic growth in case of Pakistan and India using ARDL bounds testing approach for cointegration and Clemente–Montanes–Reyes approach for unit roots keeping structural breaks in a longer time series data. The study confirms the positive relationship between military expenditures and economic growth at the initial stages and then a negative relationship after a critical point for both countries. The short run results also confirm that the military expenditures can explain the per capita GDP in the short run. Importantly, the causality runs from military expenditures to GDP.

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Notes

  1. We refer the original article for the technical discussion and mathematical derivation of the tests. We deliberately dropped it keeping brevity in mind.

  2. The results are not presented keeping brevity in mind.

  3. We are not presenting the results here keeping brevity in mind. However, these are available on request.

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Authors and Affiliations

  1. School of Economics, Quaid-i-Azam Univeristy, Islamabad, Pakistan

    Abdul Jalil, Hafiz Khuram Nadeem Abbasi & Nazia Bibi

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  1. Abdul Jalil
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  2. Hafiz Khuram Nadeem Abbasi
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  3. Nazia Bibi
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Correspondence to Abdul Jalil.

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Jalil, A., Nadeem Abbasi, H.K. & Bibi, N. Military expenditures and economic growth: allowing structural breaks in time series analysis in the case of India and Pakistan. Qual Quant 50, 1487–1505 (2016). https://doi.org/10.1007/s11135-015-0217-x

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