The causal relationship between military expenditure and economic growth in Egypt during the period from 1980 to 2019

Abstract EN

This study aimed to analyze the causality relationship between military expenditure and economic growth in Egypt during the period from 1980 to 2019.

The study used the Autoregressive Distributed Lag ARDL (bounds test) approach to test the long-run relationships between the study's economic variables (GDP, military expenditure, and fixed capital Formation).

also the study used Granger causality and Toda-Yamamoto (TY) methodology to conduct the causality test.

The study's main findings are that there is a unidirectional causality relationship between these variables, where: military expenditure does not cause GDP, however GDP causes military expenditure.

And military expenditure does not cause fixed capital; however, fixed capital causes military expenditure.

And fixed capital causes GDP, however GDP does not cause fixed capital.

Having regard to this study's findings, the study recommend that the Egyptian Government should ensure that the country's economic resources are allocated optimally to all sectors to achieve both the maximum amount of economic growth and the efficient utilization of the available resources.