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Title: Military spending and economic growth in China: a regime-switching analysis
Authors: Menla Ali, F
Dimitraki, O
Keywords: China;Economic growth;Markov switching;Military spending
Issue Date: 2014
Citation: Applied Economics, 2014
Abstract: This article investigates the impact of military spending changes on economic growth in China over the period 1953 to 2010. Using two-state Markov-switching specifications, the results suggest that the relationship between military spending changes and economic growth is state dependent. Specifically, the results show that military spending changes affect the economic growth negatively during a slower growth-higher variance state, while positively within a faster growth-lower variance one. It is also demonstrated that military spending changes contain information about the growth transition probabilities. As a policy tool, the results indicate that increases in military spending can be detrimental to growth during slower growth-higher growth volatility periods. © 2014 © 2014 The Author(s). Published by Taylor & Francis.
Description: This article has been made available through the Brunel Open Access Publishing Fund.
ISSN: 0003-6846
Appears in Collections:Brunel OA Publishing Fund
Dept of Economics and Finance Research Papers

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