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2 392 Quarterly Journal of Economics and Modelling Shahid Beheshti University * ** 93/0/5 92/8/25 (GMM C23, H5, O53 JEL mowlaeimohammad@gmailcom golkhandana@gmailcom ( * ** 47

3 (995 3 ( (6 3 military expenses 2 Adam Smith 3 Smith ( / (SIPRI Yearbook, /3

4 (GMM 202 ( ( 40 8 ( 6 ( 7 8 ( ( 9 SIPRI

5 (202 ( SIPRI -202 (

6 5 ( (2 SIPRI (3 99 ( ( ( Crowding Out Effect

7 ( (3 SIPRI -3-3 (4 ( ( ( Defense Economics 2 Ando 3 Anwar, Rafique and Joiya

8 53 (4 D D (20 2 ( Yildirim, Ocal and Keskin 2 Guns Verses Butter Trade 3 Narayan and Smith

9 (980 ( ( (986 ( (996 (2002 ( Hartly 2 Atesoglu 3 Ram 4 Augmented Solow Model

10 55 ( ( (983 (M, (C (Y 2 (986 (2 (3 (99 4 (4 5 Halicioglu 2 Biswas and Ram 3 Feder 4 Huang and Mintz (99 5

11 (2005 ( 2 ( ( (POLS ( (2-SLS ( Dunne, Smith and Willenbockel 2 Benoit 3 Vadlamannati 4 Two Stage Least Squares 5 Pooled Ordinary Least Squares

12 57 ( ( (20 ( ( GS-2SLS 2 (20 - OLS 3 ( 6 ( ( 4 ( (203 Dunne 2 Ozun and Erbaykal 3 Toda and Yamamoto 4 Dunne and Nikolaidou 5 Shahbaz, Afza and Shabbir

13 ( (380 ( (OLS ( (386 (2SLS OLS (3SLS (387 (

14 59 (OLS ( (VDA (20 ( (IRF -4 2 (996 (992 ( (A (K (Y 0< < (L ( Mankiw, Romer, and Weil 2 Knight, Loayza and Villanueva

15 , A ( 2 g (2 n m ( (m (2005 s ( ( 3 ( (3 ( ( 4 k (4 (3 ] ( 5 y ] (6 k t- t (6

16 6 ln (7 (7 (4 (2 (6 200 g (8 Ln + (9 (9 3 2 (s Dynamic Panel Data 2 Total Labor Force 3 Proxy

17 (996 (g+ 005 (202 5 (200 t (M (i=,,4 i ( M/GDP 2 3 (SIPRI 4 (WDI ( ( UNCTAD HAND Book of Statistics 3 4 Stockholm International Peace Research Institute 2 World Development Indicators

18 63 (0 i t (99 OLS 2 (98 2SLS 4 (99 3 (GMM 2SLS GMM (5 390 ( (2005 GMM 5 Arellano and Bond 2 Anderson and Hsiao 3 Generalized Method of Moments 4 Matyas and Sevestre 5 Baltagi

19 (998 4 (995 (J-Statistic 3 (99 GMM Eviews70 Stata0-6 ( (ADF-F (2 ( 5 (IPS Arellano 2 Blundell 3 Sargan Test 4 Serial Correlation 5 Im, Pesaran and Shin 6 Augmented Dicky Fuller

20 65 ( I(0-6/722 (0/0000-8/43 (0/0000-7/82 (0/0000 Ln(GDP/TLF I(0-4/62 (0/ /833 (0/0334-2/242 (0/024 Ln(n+g+ I(0-4/553 (0/0000-3/23 (0/0000-4/32 (0/0000 Ln(INV/GDP I(0-2/872 (0/0000-8/54 (0/0000-9/788 (0/0000 Ln(M/GDP Eviews70 * (2 I(0 234 /008 (0/ /46 (0/ /234 (0/0000 Ln(GDP/TLF I(0 96 /655 (0/ /224 (0/ /078 (0/04 Ln(n+g+ I(0 248 /664 (0/ /348 (0/ /48 (0/0000 Ln(INV/GDP I(0 236 /82 (0/ /2 (0/ /087 (0/0000 Ln(M/GDP Eviews70 * 5 5

21 K (N-, NT-K-N F T N RRSS URSS OLS ( ( 0/0000 0/002 0/ (GMM (3 GMM (3 Pooling Data

22 67 (GMM (3 0 /52 (0/000 0 /24 (0/000 0/85 (0/000 Ln(GDP/TLF (- - 0/08 (0/03-0/24 (0/048-0/094 (0/029 Ln(n+g+ 0 /23 (0/000 0 /9 (0/000 0/6 (0/000 Ln(INV/GDP - 0/02 (0/029-0/07 (0/08-0/058 (0/00 Ln(M/GDP - 0/008 (0/026-0/02 (0/022-0/03 (0/035 Ln(M/GDP (- 0 /084 (0/000-0/52 (0/000-0/228 (0/000 Constant 0/58 0/ 62 0 / 69 0/64 0/ 68 0 / 83 Stata0 * -0/056 (3 0/058 ( (

23 /03 (0/05 + n+ g+ 0/094 (3 ( 0/85 0/6 (3

24 69 0/07 0/02-7

25 (996 ( ( (GMM - ( ( - -

26 7 - - " ( "35-76 " (386 2 "( (309 " ( (2 8 "( " (390 " Anderson, TW & C Hsiao (98, "Estimation of Dynamic Models with Error Components", Journal of the American Statistical Association, Ando, S (2009, "The Impact of Defense Expenditure on Economic Growth Panel Data Analysis Based on the Feder Model", The International Journal of Economic Policy Studies, 4(8 4-54

27 Anwar, MA, Rafique, Z & SA Joiya (202," Defense Spending- Economic Growth Nexus A Case Study of Pakistan", Pakistan Economic and Social Review, 50 ( Arellano, M & S Bond (99,"Some Test of Specification for Panel Data Monte Carlo Evidence and Application to Employment Equations, Review of Economic Studies, Arellano, M & O Bover (995,"Another Look at the Instrumental Variable Estimation of Error Component Models", Journal of Econometrics, Atesoglu, HS (2002, "Defense Spending Promotes Aggregate Output in the United States "Evidence from Co-integration Analysis", Defense and Peace Economics, 3( Baltagi, B (2005, Econometric Analysis of Panel Data, John Wiley & Sons Ltd 2 Benoit, E (973, "Defense and Economic Growth in Developing Countries", Boston, MA Health and CO, Lexington Books 3 Biswar, B & R Ram (986, "Military Spending and Economic Growth in Less Developed Countries An Augmented Model and Further Evidence", Economic Development and Cultural Change, 34( Blundell, R & S Bond (998, "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models", Journal of Econometrics, Dunne, P (200, "Military Spending and Economic Growth in Sub- Sahran Africa", Defense and Peace Economics 6 Dunne, P, & E Nikolaidou (202, "Defense Spending and Economic Growth in the EU5", Defense and Peace Economics, 23( Dunne, P, Smith, R & D Willenbockel (2005, "Models of Military Expenditure and Growth A Critical Review ", Defense and Peace Economics, 6( Farzanegan, MR (20, "Military Spending and Economic Growth The Case of Iran", MPRA Paper, No 35498

28 73 9 Feder, G (983, "On Export and Economic Growth", Journal of Development Economics, Halicioglu, F (2004, "Defense Spending and Economic Growth in Turkey An Empirical Application of New Macroeconomic Theory", Review of Middle East Economics Finance, 2( Hartly, K (2005, "Defense Spending and its Impact on the National Economy", Center of Defense Economics, University of York 22 Huang, C & A Mintz (99, "Defense Expenditure and Economic Growth The Externality Effect", Defense Economics, Knight, M, Loayza, N & D Villanueva (996, "The Peace Dividend Military Spending Cuts and Economic Growth", IMF Staff Papers, Mankiw, NG, Romer, D & DN Weil (992, "A Contribution to the Empirics of Economic Growth", Quarterly Journal of Economics, Narayan, PK & R Smyth (2009, "A Panel Data Analysis of the Military Expenditure-External Debt Nexus Evidence from Six Middle Eastern Countries", Journal of Peace Research Ozun, A & E Erbaykal (20, "Further Evidence on Defense Spending and Economic Growth NATO Countries", Working Paper, No 9 27 Shahbaz, M, Afza, T & MS Shabbir (203, "Does Defense Spending Impede Economic Growth? Co-integration and Causality Analysis For Pakistan", Defense and Peace Economics, 24( SIPRI (Stockholm International Peace Research Institute, "Yearbooks Armaments and Disarmaments and International Security", SIPRI- Oxford University Press, New York Various issues 29 Smith, R (980, "Military Expenditure and Investment in OECD Countries ", Journal of Comparative Economics, Smith, R (995, "Demand for Military Expenditure", by Hartley and Sandler, Amsterdam, Vadlamannati, KC (2008, "Exploring the Relationship Between Military Spending & Income Inequality in South Asia", The William Davidson Institute, Working Paper, No 98

29 Yildirim, J, Ocal, N & H Keskin (20, "Military Expenditure, Economic Growth and Spatial Spillovers A Global Perspective", International Conference on Applied Economics 8-82

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