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The role of military expenditures on economic growth in Italy

Journal of Economics Bibliography

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Title The role of military expenditures on economic growth in Italy
 
Creator VITALI, Federico;

University of the People
 
Subject Defense spending, Economic growth, Italy.
H50; H56; H60; H63; O40; O49.
 
Description Abstract. The purpose of this paper is to evaluate the likelihood of a nexus between economic growth and defense spending in Italy. With the US urging its NATO allies to stop “free-riding” through diminishing budget allocations to military expenses, and European policymakers hard-pressed by populist tail-winds, the debate on the effects of military expenditure on the economy is more current than ever. I briefly review the literature supporting each of the three possible effects: positive, negative, and insignificant. Scholars use various economic models like the Feder-Ram model (Biswan & Ram, 1986), the augmented Solow model (Mankiw, Romer, & Weil, 1992), and endogenous growth models to investigate whether military spending affects economic growth and the degree and direction of causality. In this paper, Ido notutilize econometric models to establish a relationship between the two variables, but rather leverage on existing research and my analysis to formulate an educated guess. The relevant studies, on countries similarly industrialized, lean towards a negative or insignificant relationship between economic growth and defense expense. Based on the evidence presented in the paper, I postulate that the role of military expenditure on economic growth is insignificant in Italy. Nevertheless, investing in the national defense industry to consolidate and advance Italy’s ninth position as a global exporter of arms, would bring benefits regarding both balance of trade and strategic long-term partnerships.Keywords. Defense spending, Economic growth, Italy.JEL. H50, H56, H60, H63, O40, O49.
 
Publisher Journal of Economics Bibliography
 
Contributor —
 
Date 2018-10-20
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEB/article/view/1738
10.1453/jeb.v5i3.1738
 
Source Journal of Economics Bibliography; Vol 5, No 3 (2018): September; 175-180
2149-2387
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEB/article/view/1738/1745
 
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http://creativecommons.org/licenses/by-nc/4.0