Defense Expenditures and Economic Growth: The Externality Effect

Abstract

In a series of articles published in the Fall 1990 issue of Defence Economics Alexander (1990), Atesoglu and Mueller (1990) and Huang and Mintz (1990) have all specified and empirically estimated defence‐growth models based on a neoclassical production function. We now isolate the externality component in our model, re‐estimate its coefficients using data on the U.S. economy 1952–88 and compare specifications and results with Atesoglu and Mueller (1990) and Alexander (1990).