Defense spending and economic growth: evidence from China, 1952-2012
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This paper examines whether defense expenditures contributed to economic growth in China for the 1952-2012 period. We examine the contribution of defense to economic growth using recently published official data on economic activity, defense, and government expenditures. We employ the Feder-Ram and augmented Solow models of economic growth to explore the defense-growth relationship. The Feder-Ram model appears to poorly explain economic growth in China. The augmented Solow model suggests, however, that a 1% increase in defense expenditures raises the economic growth rate by approximately 0.15-0.19%.
The article of record as published may be found at http://dx.doi.org/10.1080/10242694.2015.1099204
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