Correlation of military expenditures and economic growth: lessons for Romania

This paper examines the correlation between public policies in the field of military expenditures and economic growth in Romania. The research is built upon the vast literature focused on the field of public policies and economic growth. Whereas economic growth became one of the most dynamic areas i...

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Bibliographic Details
Published in:Quality & quantity 2019-11, Vol.53 (6), p.2957-2968
Main Authors: Lobont, Oana Ramona, Glont, Oana Ramona, Badea, Leonardo, Vatavu, Sorana
Format: Article
Language:English
Subjects:
Analysis
Armed forces
Bidirectionality
Capital
Causality
Defense spending
Economic aspects
Economic development
Economic growth
Economic models
Economic sectors
Expenditures
Gross domestic product
Methodology of the Social Sciences
Public policy
Research methodology
Social Sciences
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Summary:This paper examines the correlation between public policies in the field of military expenditures and economic growth in Romania. The research is built upon the vast literature focused on the field of public policies and economic growth. Whereas economic growth became one of the most dynamic areas in economics, this correlation will consider the determinants of the real sector development through economic phenomenon modeling. The impact of military expenditures on growth is analysed for Romania, using annual data over the period 1991–2016. The research methodology employed is the Granger causality test. The empirical results reveal that there is a bidirectional relationship between military expenditure and GDP over the long run, with a positive effect described by both relationships through several models exemplified in the analysis. From the economic point of view, these results highlight the impact of military expenditures, generating different positive effects on labor, capital, economic growth and efficient use of resources in the economic sector, at the national level.
ISSN:0033-5177
1573-7845
DOI:10.1007/s11135-019-00910-9