The Effects of Defense Expenditure on Economic Growth of Pakistan

Abstract

The main aim of this paper is to analyze the effect of defense expenditure on output growth of Pakistan and used series data from 1975 to 2018 period. The study used the ARDL techniques to analyze the data and the ECM was also used to check the convergence to the long run (LR) equilibrium. This study found that Defense expenditure (DE) has positive and noteworthy impact on output growth. The study concluded that the defense expenditure was mandatory to influence the economic growth (GGDP) of Pakistan. The study recommended that the government should be to promote economic growth which in turn provides resources to finance defense expenditures and spend more on the defense sector to achieve higher economic growth, create a peaceful environment.