The main objective of the paper is to decipher the military expenditure--economic growth relationship, taking the level of economic development (income) into consideration. Our findings suggest the following: (i) military expenditure has a significantly negative relationship to economic growth...

This paper employs both linear and non-linear models to investigate the relationship between national defense spending and economic growth for Taiwan and China. Using data from 1953-2000 on defense spending, GDP, import, export and capital, we find that China's defense spending leads that of...