Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/85306
Authors: 
Reitschuler, Gerhard
Löning, Ludger J.
Year of Publication: 
2004
Series/Report no.: 
Discussion Papers, Ibero America Institute for Economic Research 97
Abstract: 
The defense-growth nexus is investigated empirically using longitudinal data for Guatemala and allowing the effect of defense spending on growth to be nonlinear. Using recently developed econometric methods involving threshold regressions, evidence of a level-dependent effect of military expenditure on GDP growth is found: a positive and significant externality effect of defense spending prevails for relatively low levels of defense spending and becomes negative, albeit insignificant, for higher levels.
Subjects: 
Guatemala
defense expenditures
nonlinearity
economic growth
externality effect
JEL: 
E13
C22
H56
Document Type: 
Working Paper

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