Military spending and economic growth in China: A regime-switching analysis

Menla Ali, Faek and Dimitraki, O (2014) Military spending and economic growth in China: A regime-switching analysis. Applied Economics, 46 (28). pp. 3408-3420. ISSN 0003-6846

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This article investigates the impact of military spending changes on economic growth in China over the period 1953 to 2010. Using two-state Markov-switching specifications, the results suggest that the relationship between military spending changes and economic growth is state dependent. Specifically, the results show that military spending changes affect the economic growth negatively during a slower growth-higher variance state, while positively within a faster growth-lower variance one. It is also demonstrated that military spending changes contain information about the growth transition probabilities. As a policy tool, the results indicate that increases in military spending can be detrimental to growth during slower growth-higher growth volatility periods. © 2014 The Author(s). Published by Taylor & Francis.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences
Depositing User: Joy Blake
Date Deposited: 05 Dec 2017 16:03
Last Modified: 07 Dec 2017 10:58

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