INTERRELATIONSHIP BETWEEN MILITARY SPENDING AND ECONOMIC GROWTH (INVESTIGATION BY GMM TECHNIQUE
INTERRELATIONSHIP BETWEEN MILITARY SPENDING AND ECONOMIC GROWTH (INVESTIGATION BY GMM TECHNIQUE

Summary/Abstract: The reasoning about interrelationship between state’s military spending and economic growth have never been apodictic truth, providing scientists with fertile ground for meaningful discussions. In this study, the impact of military spending on economic growth was examined for 15 countries with highest share of military spending in gross government expenditure, using the GMM (Generalized Method of Moments) over the period 2005-2017. For comparative analysis, we added dummy variables in the regression model to assess the impact of military spending on growth in each country separately. The results of study allow us to conclude that in the 15 surveyed countries the significant negative correlation exists between government military spending and GDP as well as the positive correlation exists between non-military spending and GDP. Herewith, an analysis carried out for individual countries by using dummy variables technique, showed that for some countries the influence of military spending on economic growth is positive, and it is negative for other countries.

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