Consequential Effects of Defence Expenditure on Economic Growth of Saudi Arabia: 1970-2012

Ageli, Mohammed Moosa and Zaidan, Shatha Mousa (2012): Consequential Effects of Defence Expenditure on Economic Growth of Saudi Arabia: 1970-2012. Published in: International Journal of Economics and Finance , Vol. 5, No. 2 (10 January 2013): pp. 155-163.

Abstract

This study investigates the causality relationship between defence expenditures and Non Oil economic growth in Saudi Arabia over the period 1970-2012. Using Unit root tests, Johansen’s co-integration test and Granger Causality test. In this paper we found the existence of bi-directional causality relationship running from Non Oil-GDP to defence expenditure. The results show that, in Saudi Arabia, the model of defence expenditure is found to hold for Non Oil-GDP.

• Item Type: MPRA Paper
• Language: English
• Keywords: Defence Expenditure, Economic Growth, Unit Root test, Co-integration test, Granger causality and Error Correction Models (ECM), Saudi Arabia
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C12 - Hypothesis Testing: General; H - Public Economics > H5 - National Government Expenditures and Related Policies > H56 - National Security and War; N - Economic History > N1 - Macroeconomics and Monetary Economics ; Industrial Structure ; Growth ; Fluctuations > N15 - Asia including Middle East

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