Military expenditure economic growth nexus in Jordan: an application of ARDL bound test analysis in the presence of breaksThe Hashemite Kingdom of Jordan is a nation that has persisted through turbulent times. The country’s leaders have long attempted to balance the allocation of resources between a strong military and a developing economy in their quest for stability, peace and prosperity. This paper examines the relationship between Jordan’s military expenditure and economic growth during the period 1970-2015 to shed further light. Using cointegration techniques allowing for structural breaks based on Gregory and Hansen (1996), and the ARDL methodology this paper tests the short and long-run equilibrium relationship between military expenditure and economic growth in Jordan. Furthermore, with the error correction model (ECM) and CUSUM and CUSUMSQ tests, we examine the stability of the above relationship. The results show that there is a positive, long-run and short run relationship between military expenditure and economic growth in Jordan during the period under study. This finding has important policy implication to the Jordanian state as it justifies that the transfer of resources to the military has not negatively impacted economic growth.
Sovereign debt, deficits and defence spending: the case of GreeceThe outbreak of the sovereign debt crisis at the end of 2009 in Greece led to a severe recession, and constant economic problems. This paper investigates military expenditure among others as a potential factor to the growth of sovereign debt in Greece over the period 1960 until currently. Our empirical findings suggest that high deficits, inflation and military spending have been the primary causes of debt growth in Greece. The structural break models reveal a much higher effect of deficits and inflation in the post-1990 period while the threshold switching regression, based on the level of sovereign debt, indicate that for levels of debt-to-GDP ratio above 90% deficits, inflation and military expenditures had significantly more pronounced effects on government debt changes.