The Effect of Military expenditures on Economic Growth in the Middle East Countries: Using Generalized Method of Moments (GMM)

Document Type : Scientific paper

Authors

lorestan university

Abstract

The present paper examines the effect of military expenditures on economic growth in 11 Middle Eastern countries. Putting the Middle East in a sensitive and strategic area on the one hand and increasing the military expenditure of the countries of this region on the other hand, the need to examine the effect of military expenditures on the economic growth of the countries of the region is important. Military spending can have both a positive and negative effect on economic growth. In this regard, a generalized Solow model (provided by Knight, Loayza and Villanueva (1996) has been used during the period of 1988-2018. The findings of this study, using Dynamic Panel Technique and Generalized Method of Moments (GMM), indicate the negative effect of military expenditures on the economic growth of the Middle East countries. Therefore, as military threats in the Middle East are reduced and the region has more political stability, economic development costs will replace military spending and will generate more economic growth for the countries of the region.

Keywords

References

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Macroeconomics Research Letter
Volume 11, Issue 21
June 2016
Pages 13-31

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History

  • Receive Date: 17 September 2013
  • Revise Date: 08 March 2017
  • Accept Date: 27 February 2017

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