The effect of military expenditures on growth: OECD sample (1996-2016)

The main purpose of this study is to investigate the effect of military expenditures on economic growth which is stimulating via technology or positive externality. This thesis, which has been extensively studied in the applied literature, investigates that how capital accumulation and technological development -which is the main components of long-term economic growth- measures and interacts with the military expenditure variable. In this context, we use the data of 33 OECD countries which is mainly obtained from SIPRI and World Bank. These data is estimated by the System GMM on Augmented Solow Model and Feder-RAM theoretical based models. In the evaluation that can be made under the guidance of the analysis these results shed light that emerging defense industry has caused significant changes in the composition of military expenditures. As with the positive contribution of this study which will have evaluated by any policy maker, it will be considered as a real value by us.