Open AccessThe impact of military spendings on economic growth of Pakistan
Author(s) -
Sajjad,
Tariq,
Muhammad Tariq
Publication year - 2017
Publication title -
journal of applied economics and business studies
Language(s) - English
Resource type - Journals
eISSN - 2663-693X
pISSN - 2523-2614
DOI - 10.34260/jaebs.116
Subject(s) - cointegration , distributed lag , economics , unit root , unit root test , government (linguistics) , development economics , sovereignty , macroeconomics , political science , econometrics , linguistics , philosophy , politics , law
A sound national defence is extremely essential for a country’s sovereignty. The geostrategic position of Pakistan and its deterrence policy against neighbouring India have generally been the reasons for stringent military financing. Defence spending affects all sectors of the economy directly or indirectly. This study aims to investigate the influence of government military expenditures on the economic growth of Pakistan over the period 1987-2016. Augmented Dickey-Fuller test has been used for checking the unit root in the data. Autoregressive Distributed Lag (ARDL) bounds testing approach to cointegration has been applied to analyze the relationship between military spending and economic growth. The findings indicate that military expenditure has a positive impact on Pakistan's economic growth in the long-run, however it has negative effect on economic growth in the short-run.