A CAUSALITY ANALYSIS OF THE MILITARY SPENDING AND ECONOMIC GROWTH: THE COLOMBIAN CASE OF 1960-2016

This paper establish an approximation to the existing causality relation between the military expenditure and economic growth for Colombia in the period of 1960 to 2017. The methodology uses the approach of the VEC models to estimate the long-run and short-run causality between the variables and its relative impact. The results indicate causality in Granger terms only from the military expenditure to the GDP and the existence of co-integration among them. In the short-run, the impact of this variable is positive to the GDP while in the long-run the military expenditure effect negatively the growth.