Guns or Butter ? ” Revisited : Robustness and Nonlinearity Issues in the Defense-Growth Nexus August 2003 Working

@inproceedings{Cuaresma2003GunsOB,
  title={Guns or Butter ? ” Revisited : Robustness and Nonlinearity Issues in the Defense-Growth Nexus August 2003 Working},
  author={Jes{\'u}s Crespo Cuaresma and Gerhard Reitschuler},
  year={2003}
}
The relationship between military expenditure and growth is studied taking into account potential nonlinearities and robustness issues in the specification of the econometric models used. Using cross-country growth regressions and the widely used FederRam model, the partial correlation between defense spending and economic growth appears robust and significantly negative only for countries with a relatively low military expenditure ratio. While the externality effect appears positive in this… CONTINUE READING

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