The Effect of the Size of the Military on Stock Market Performance in the United States and the UK (original) (raw)
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Defence and Peace Economies, Routledge , 2014
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Employing a panel vector autoregression (PVAR) methodology, the paper addresses the nexus between military expenditures and two key macroeconomic variables, namely growth rates and investment spending using SIPRI's new consistent time series dataset. Given data constraints, the sample chosen was a compromise between T and N for the empirical tests conducted. It consists of 65 countries and covers the period 1971-2014 that allows for a total of 2730 observations. The PVAR model is estimated for the entire sample as well as three income group sub-samples. Findings reported herein are not uniformed, and noteworthy differences between the three income groups were unearthed by the empirical tests conducted.
2016
This study aims to empirically test the relationship between military spending and private investments for the period 1975-2014. Throughout this aim, in order to test the stationarity of series and the co-integration relationship between them, unit root test of Carrioni-i-Silvestre et al. (2009) and co-integration test of Maki (2012) are used, respectively. Then, co-integration coefficients are estimated via Stock and Watson (1993)’s dynamic ordinary least squares (DOLS) method. Finally, causal relationships between the series are tested by Hacker and Hatemi-J (2012) bootstrap causality test. Empirical findings point out the positive relationship between military spending and private investment (crowding in effect) in long term. However, the results of the causality test indicate that there is no causality from military spending to private investments. This study is thought to make a contribution to the literature for being the first study analyzing the relationship between military...
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Global Journal of Science Frontier Research
Our research revolves around the topic of considering the military expenditures per capita as a dependent variable and the GDP per capita and CO2 Emissions per capita as two explanatory variables. The study is made up of ten sections addressing several points, each of which clarifies the research method in order to reach a conclusion revealing the importance of the findings. Beginning with the basic statistical characteristics, such as averages, standard deviations, minimums, maximums and the Compound Annual Growth Rate (CAGR), a benefit use of the graph of each variable for each country has been highlighted for a better understanding of the rising and falling during its temporal evolution. The various aspects of the panel analysis have been completed as the questions of individual specific heterogeneity in panel data, the panel unit root tests using the most famous from the first and second generations, and the co-integration analysis according to the Pedroni’s approach, which has ...
Military Spending and Profit Rate: A Circuit of Capital Model with a Military Sector
Defence and Peace Economics, 2020
This paper aims to contribute to the theoretical discussions on the effect of military spending on the economy. To this end, it first modifies the circuit of capital model proposed by Duncan Foley in 1982, which represents money value stock-flow relations for capital in Capital Volume II. Foley’s model is extremely useful for examining the relationship between military spending and the rates of profit as it allows one to specify the parameters in both the military and civilian sectors. By incorporating the military sector, the adapted model shows that a larger military sector is associated with a higher rate of profit. Second, the paper provides some empirical evidence on the US for 1968–2008 for the main proposition of the theoretical model.
Causal Analysis of Economic Growth and Military Expenditure
2012
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Military Expenditures and Profit Rate: Evidence from OECD Countries
Adapting Foley (1982)’s Marxian model of the circuit of capital to specify the role of military expenditures on the rate of profits the paper provides evidence for 24 OECD countries for the period of 1963-2008 by employing a panel autoregressive distributed lag model for the first time. Findings show that while for the whole period there is a positive linkage between military expenditures and profit rates, in the post-1980 era, the impact of military expenditures is negative. Findings suggest no strong evidence to underscore the assertion that for arms-exporting countries there is positive linkage between military expenditures and profit rates, and negative for non-arms-exporter countries.
The Effect of Military Expenditure on Profit Rates: Evidence from Major Countries
2018
This article provides evidence of the effect of military expenditures on the rate of profits by focusing on 32 major countries for the period of 1963–2008 by using data from the Extended Penn World Tables, the University of Texas Inequality Project Estimated Household Income Inequality, the World Development Indicator, and the Stockholm International Peace Research Institute. The article employs a Generalized Method of Moment model within a Marxist framework. Findings show that military expenditures have positive effect on the rate of profits. It is also showed that increasing income inequality increases the rate of profits. Finally, the findings suggest that while military expenditures have a positive effect on the profit rates in the case of both arms-exporting countries and net-arms exporters, the relationship is not that significant in the case of arms-importing countries.
Military Expenditure and Economic Growth: The Case of Japan
Japan’s Military Renaissance?, 1993
This study applies Johansen co-integration and Granger causality tests to examine the long-run equilibrium relationship and the causality between military expenditure (ME) and economic growth (GDP) for the case of Turkey which has been a rapidly developing economy for the last decade. Annual data covering 1988-2013 periods is used to conduct empirical investigation. The findings of the study indicate that in the long-run, military spending and economic growth are co-integrated. The results of Granger causality test suggests that there is a uni-directional relationship running from economic growth to military spending, however any causality from military spending to economic growth isn't observed in the present study.