Document Type : Original Article
Authors
1
Assistant Professor, Department of Economics, Faculty of Economics and Management, Payame Noor University, Tehran, Iran.
2
Professor, Department of Economics, Faculty of Administrative Science and Economics, University of Isfahan, Isfahan, Iran. Email:k_azarbaiejani@ase.ui.ac.ir
Abstract
Military expenditures can indirectly affect the economy by reducing risk and creating stability, or by increasing the level of income through the production of military goods and services. Therefore, this research has been conducted with the aim of investigating the role of military expenditures in economic growth. For this purpose, the statistical population consists of 81 countries worldwide during the years 1998-2022. The estimations were made using the two-way panel data method. In this regard, the factors affecting economic growth are the variables of military expenditures, inflation rate, trade, unemployment rate, and government size. All collected data are from the World Bank database, in millions of US dollars and at constant 2017 prices.
According to the estimates, military expenditures, with a coefficient of 1/12, have a negative and significant impact on economic growth. On the other hand, economic growth has a positive and significant relationship with the variables of trade and government size, and a negative and significant relationship with the unemployment rate variable. Based on the results, it is suggested that if a country is not facing regional threats, and considering the positive impact of trade and government size on economic growth, governments should try to increase the necessary resources for other sectors, especially the education and health sectors; in order to help increase the level of economic growth of countries through the expansion of production of goods and services, reducing the unemployment rate, and supporting exports.
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