Abstract
The effects of military expenditures on economic growth continue to be a subject of considerable debate, with a lack of agreement in the literature. This paper takes advantage of the World Penn Tables, World Military Expenditures and Arms Transfers Database to contribute to the debate using empirical methods that are more applicable. A large panel of Middle Eastern countries for the period 1980–2017 is constructed to explore the long-run relationship between military expenditures and economic growth. A pooled-regression model, random-effects model and a fixed-effects model are estimated. It is found that military expenditures Granger-cause growth but in the fixed-effects model there are no significant findings.