Tiwari, Aviral and Shahbaz, Muhammad (2011): Does Defence Spending Stimulate Economic Growth in India?
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The aim of present is to reinvestigate the effect of defence spending on economic growth using Zivot and Andrews (1992) and Lee and Strazicich, (2003) structural unit root tests and ARDL bounds testing approach to cointegration in augmented version of Keynesian model for Indian economy. Our analysis confirmed long run relationship between the variables and, results indicated positive effect of defence spending on economic growth (also negative impact after a threshold point). Investment and trade openness stimulate economic growth while economic growth is inversely affected by interest rate. Granger causality analysis showed bidirectional causal relationship between defence spending and economic growth as probed by variance decomposition approach.
|Item Type:||MPRA Paper|
|Original Title:||Does Defence Spending Stimulate Economic Growth in India?|
|English Title:||Does Defence Spending Stimulate Economic Growth in India?|
|Keywords:||Defence Spending, Economic Growth, Cointegration|
|Subjects:||B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B22 - Macroeconomics|
|Depositing User:||Muhammad Shahbaz|
|Date Deposited:||12. May 2011 07:02|
|Last Modified:||12. Feb 2013 09:15|
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