This paper develops an endogenous growth model to examine the linkage between military expenditures and economic growth. We adopt the modeling strategy where both the supply side and the demand side effects of national defense are taken into considerations. Our result finds that a rise in...

This paper attempts to examine the effect of an anticipated foreign military threat on the steady-state growth rate and the transitional behavior of the economy. The modeling strategy follows the Sandler and Hartley (1995) and Dunne et al. (2005) viewpoints to emphasize the role of national...