The military Expenditure and Economic Growth in the case of the South Korea: The dynamic Computational Equilibrium model in an Endogeneous Growth Perspective

Hee-Won Yang, Chan-Young Hong, Seong-Mun Jeong and Jeong-Dong Lee ()

No 4264, EcoMod2012 from EcoMod

Abstract: This paper analyses the effect of military expenditure on economic growth. With various channels through which military expenditure may influence economic growth, much of the defense economics literature has found inconsistent results. This study is based on the national defense expense for the South Korea, the base year of 2009 is chosen. The effects of the military expenditure are examined in the endogeneous growth perspective. We also employ the dynamic Computational General Equilibrium in order to measure the aggregate effect, considering the channels of the positive or negative effect and the reaction of individual industries and economic agents which it follow in change of military expenditure. The positive or negative effects of military expenditure on industry varies over sectors. GDP growth is affected by military spending. We examine the change of GDP growth in case of increase(or decrease) of military spending. But welfare level including nation’s security Index may improve or be decreased.

Keywords: SOUTH KOREA; General equilibrium modeling (CGE); Impact and scenario analysis (search for similar items in EconPapers)
Date: 2012-07-01
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