Investigating Time-Varying Causality Between Military Spending and Macroeconomic Indicators in the United States

IF 1.7 Q2 POLITICAL SCIENCE
Isiaka Akande Raifu, Joshua Adeyemi Afolabi
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引用次数: 0

Abstract

Abstract Military expenditures constitute a large chunk of the United States’ annual budget and its macroeconomic implications had been modelled using the Granger causality test, which suffers power loss when variables are subjected to structural breaks. This study explored alternative approaches by applying both traditional VAR-based Granger causality and the time-varying causality test techniques to obtain new evidence on the causality between military spending and selected macroeconomic indicators (economic growth, investment, unemployment and inflation rate) in the United States. Relevant data covering 1972Q1–2021Q2 were analysed. The results of the VAR-based Granger Causality test are dominated by a unidirectional causality that runs from macroeconomic variables to military spending and the result are robust to alternative military spending measures. However, the results of the time-varying causality method show that bidirectional causality dominates the relationship between military spending and some macroeconomic indicators, especially economic growth, investment and unemployment. With the variance observed in the causality between military spending and macroeconomic indicators, policymakers need to moderate military spending to achieve desired economic outcomes.
调查美国军费开支与宏观经济指标之间随时间变化的因果关系
军事开支占美国年度预算的很大一部分,其宏观经济影响已经使用格兰杰因果检验建模,当变量遭受结构性断裂时,它会遭受功率损失。本研究通过应用传统的基于var的格兰杰因果关系和时变因果检验技术,探索了替代方法,以获得关于美国军费与选定宏观经济指标(经济增长、投资、失业率和通货膨胀率)之间因果关系的新证据。分析了1972Q1-2021Q2的相关数据。基于var的格兰杰因果关系检验的结果由从宏观经济变量到军费开支的单向因果关系主导,结果对替代军费开支措施具有稳健性。然而,时变因果关系方法的结果表明,军费与一些宏观经济指标,特别是经济增长、投资和失业之间的关系,双向因果关系占主导地位。鉴于军费开支与宏观经济指标之间的因果关系存在差异,政策制定者需要适度调整军费开支,以实现预期的经济成果。
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来源期刊
CiteScore
2.50
自引率
10.00%
发文量
13
期刊介绍: The journal accepts rigorous, non-technical papers especially in research methods in peace science, but also regular papers dealing with all aspects of the peace science field, from pure abstract theory to practical applied research. As a guide to topics: - Arms Control and International Security - Artificial Intelligence and Cognitive Studies - Behavioral Studies - Conflict Analysis and Management - Cooperation, Alliances and Games - Crises and War Studies - Critical Economic Aspects of the Global Crises - Deterrence Theory - Empirical and Historical Studies on the Causes of War - Game, Prospect and Related Theory - Harmony and Conflict - Hierarchy Theory
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