Military Expenditure Economic Growth Nexus in Jordan: An Application of ARDL Bound Test Analysis in the Presence of Breaks

Ouran Dimitraki; Sandar Win

doi:10.1080/10242694.2020.1730113

Military Expenditure Economic Growth Nexus in Jordan: An Application of ARDL Bound Test Analysis in the Presence of Breaks

Ouran Dimitraki, Sandar Win

School of Economics, Finance and Accounting

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Abstract

The Hashemite Kingdom of Jordan is a nation that has persisted through turbulent times. The country’s leaders have long attempted to balance the allocation of resources between a strong military and a developing economy in their quest for stability, peace and prosperity. This paper examines and sheds further light on the relationship between Jordan’s military expenditure and its economic growth during the period 1970–2015. Using cointegration techniques allowing for structural breaks based on Gregory and Hansen (1996), and the ARDL methodology this paper tests the short– and long–run equilibrium relationship between military expenditure and economic growth in Jordan. Furthermore, with the error correction model (ECM) and the CUSUM and CUSUMSQ tests, we examine the stability of the above relationship. The results reveal positive short– and long–run relationships between military expenditure and economic growth in Jordan, during the period under study. This finding has important policy implication for the Jordanian state, as it justifies the transfer of resources to the military, showing that it has not had a negative impact on economic growth.

Original language	English
Pages (from-to)	(In-press)
Journal	Defence and Peace Economics
Volume	(In-press)
Early online date	23 Feb 2020
DOIs	https://doi.org/10.1080/10242694.2020.1730113
Publication status	E-pub ahead of print - 23 Feb 2020

Bibliographical note

This is an Accepted Manuscript of an article published by Taylor & Francis in Defence and Peace Economics on 23/02/2020, available online: http://www.tandfonline.com/10.1080/10242694.2020.1730113

Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders.

Keywords

military expenditure
Economic growth
Jordan
cointegration
ARDL

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10.1080/10242694.2020.1730113

Post-PrintAccepted author manuscript, 633 KBLicence: CC BY-NC

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title = "Military Expenditure Economic Growth Nexus in Jordan: An Application of ARDL Bound Test Analysis in the Presence of Breaks",

abstract = "The Hashemite Kingdom of Jordan is a nation that has persisted through turbulent times. The country{\textquoteright}s leaders have long attempted to balance the allocation of resources between a strong military and a developing economy in their quest for stability, peace and prosperity. This paper examines and sheds further light on the relationship between Jordan{\textquoteright}s military expenditure and its economic growth during the period 1970–2015. Using cointegration techniques allowing for structural breaks based on Gregory and Hansen (1996), and the ARDL methodology this paper tests the short– and long–run equilibrium relationship between military expenditure and economic growth in Jordan. Furthermore, with the error correction model (ECM) and the CUSUM and CUSUMSQ tests, we examine the stability of the above relationship. The results reveal positive short– and long–run relationships between military expenditure and economic growth in Jordan, during the period under study. This finding has important policy implication for the Jordanian state, as it justifies the transfer of resources to the military, showing that it has not had a negative impact on economic growth.",

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note = "This is an Accepted Manuscript of an article published by Taylor & Francis in Defence and Peace Economics on 23/02/2020, available online: http://www.tandfonline.com/10.1080/10242694.2020.1730113 Copyright {\textcopyright} and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. ",

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N2 - The Hashemite Kingdom of Jordan is a nation that has persisted through turbulent times. The country’s leaders have long attempted to balance the allocation of resources between a strong military and a developing economy in their quest for stability, peace and prosperity. This paper examines and sheds further light on the relationship between Jordan’s military expenditure and its economic growth during the period 1970–2015. Using cointegration techniques allowing for structural breaks based on Gregory and Hansen (1996), and the ARDL methodology this paper tests the short– and long–run equilibrium relationship between military expenditure and economic growth in Jordan. Furthermore, with the error correction model (ECM) and the CUSUM and CUSUMSQ tests, we examine the stability of the above relationship. The results reveal positive short– and long–run relationships between military expenditure and economic growth in Jordan, during the period under study. This finding has important policy implication for the Jordanian state, as it justifies the transfer of resources to the military, showing that it has not had a negative impact on economic growth.

AB - The Hashemite Kingdom of Jordan is a nation that has persisted through turbulent times. The country’s leaders have long attempted to balance the allocation of resources between a strong military and a developing economy in their quest for stability, peace and prosperity. This paper examines and sheds further light on the relationship between Jordan’s military expenditure and its economic growth during the period 1970–2015. Using cointegration techniques allowing for structural breaks based on Gregory and Hansen (1996), and the ARDL methodology this paper tests the short– and long–run equilibrium relationship between military expenditure and economic growth in Jordan. Furthermore, with the error correction model (ECM) and the CUSUM and CUSUMSQ tests, we examine the stability of the above relationship. The results reveal positive short– and long–run relationships between military expenditure and economic growth in Jordan, during the period under study. This finding has important policy implication for the Jordanian state, as it justifies the transfer of resources to the military, showing that it has not had a negative impact on economic growth.

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SN - 1024-2694

ER -

Military Expenditure Economic Growth Nexus in Jordan: An Application of ARDL Bound Test Analysis in the Presence of Breaks

Abstract

Bibliographical note

Keywords

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