ABSTRACT
There is serious disagreement among scholars of defense economics and politics on the impact of military spending on economic performance. Some scholars found military expenditures to have a dampening impact on the economy, others found a positive correlation between military spending and various indicators of economic performance, while still others were unable to find any evidence for a defense-growth tradeoff (see Chan 1985; Gold 1990; and Lindgren 1984 for comprehensive reviews of the literature). Stephanie Neuman (1979, 470) has therefore concluded that, ‘despite the volume of writing on the subject, we still do not know whether there is a causal relationship between military expenditures [and economic performance], much less what that relationship is.’
