Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective

Drivers and outcomes of military expenditures are an important topic in geopolitics and public debate. It is often argued that increases in the military budget can boost the economy through extended military equipment production. What should then be noticeable is a feedback relationship between mili...

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Main Authors: Rafał Woźniak, Jacek Lewkowicz
Format: Article
Language:English
Published: Collegium of Economic Analysis, SGH Warsaw School of Economics 2023-06-01
Series:Gospodarka Narodowa. The Polish Journal of Economics
Subjects:
Online Access:https://gnpje.sgh.waw.pl/Can-We-Have-More-Butter-and-Guns-Simultaneously-An-Endogeneity-Perspective,168221,0,2.html
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author Rafał Woźniak
Jacek Lewkowicz
author_facet Rafał Woźniak
Jacek Lewkowicz
author_sort Rafał Woźniak
collection DOAJ
description Drivers and outcomes of military expenditures are an important topic in geopolitics and public debate. It is often argued that increases in the military budget can boost the economy through extended military equipment production. What should then be noticeable is a feedback relationship between military expenditures and the current state of the economy. This paper investigates this reverse relationship at the macro level using an unbalanced panel dataset of 173 countries over the period 1949–2020. Our empirical analysis implies that the claimed positive feedback loop between military expenditures and economic growth is either completely absent or, at most, very weak.
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spelling doaj.art-3de1eebc676b4ba98973497a1a106cc92023-07-01T09:51:50ZengCollegium of Economic Analysis, SGH Warsaw School of EconomicsGospodarka Narodowa. The Polish Journal of Economics2300-52382023-06-013142284610.33119/GN/168221168221Can We Have More Butter and Guns Simultaneously? An Endogeneity PerspectiveRafał Woźniak0https://orcid.org/0000-0001-9940-3771Jacek Lewkowicz1https://orcid.org/0000-0001-9430-4926Faculty of Economic Sciences, University of Warsaw, PolandFaculty of Economic Sciences, University of Warsaw, PolandDrivers and outcomes of military expenditures are an important topic in geopolitics and public debate. It is often argued that increases in the military budget can boost the economy through extended military equipment production. What should then be noticeable is a feedback relationship between military expenditures and the current state of the economy. This paper investigates this reverse relationship at the macro level using an unbalanced panel dataset of 173 countries over the period 1949–2020. Our empirical analysis implies that the claimed positive feedback loop between military expenditures and economic growth is either completely absent or, at most, very weak.https://gnpje.sgh.waw.pl/Can-We-Have-More-Butter-and-Guns-Simultaneously-An-Endogeneity-Perspective,168221,0,2.htmleconomic developmentmilitary expendituresarms raceendogeneity
spellingShingle Rafał Woźniak
Jacek Lewkowicz
Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective
Gospodarka Narodowa. The Polish Journal of Economics
economic development
military expenditures
arms race
endogeneity
title Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective
title_full Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective
title_fullStr Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective
title_full_unstemmed Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective
title_short Can We Have More Butter and Guns Simultaneously? An Endogeneity Perspective
title_sort can we have more butter and guns simultaneously an endogeneity perspective
topic economic development
military expenditures
arms race
endogeneity
url https://gnpje.sgh.waw.pl/Can-We-Have-More-Butter-and-Guns-Simultaneously-An-Endogeneity-Perspective,168221,0,2.html
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AT jaceklewkowicz canwehavemorebutterandgunssimultaneouslyanendogeneityperspective