Benoit Revisited: Defense Spending and Economic Growth in LDCs

In the early 1970s, Emile Benoit shocked development economists by presenting positive cross-country correlations between military expenditures and economic growth rates in less developed countries. Skeptics have abounded, and Benoit's research has been much worked over, both conceptually and statistically. This paper reviews this debate. We conclude that Benoit's findings were aberrant: Most studies suggest that military spending does have an adverse impact on economic growth in developing countries, largely through its adverse effect on saving and investment.Center for Research on Economic Development, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100729/1/ECON197.pd

A Data Set on International Trade in Armaments for the Major Western Industrialized and Developing Countries for 1980: Sources and Methodological Issues

The purpose of our paper is to present a data set on international trade in armaments by country/region of origin and destination for the major Western industrialized and developing countries for 1980.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100730/1/ECON198.pd

Benoit Revisted: Defense Spending and Economic Growth in LDCS

In the early 1970s, Emile Benoit shocked development economists by presenting positive cross-country correlations between military expenditures and economic growth rates in less developed countries. Skeptics have abounded, and Benoit's research has been much worked over, both conceptually and statistically. this paper reviews this debate. We conclude that Benoit's findings were aberrant: Most studies suggest that military spending does have an adverse impact on economic growth in developing countries, largely through its adverse effect on saving and investment.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100728/1/ECON196.pd

Labor Market Dynamics During a Period of Structural Change: California inEarly 1990s

This paper contributes to the literature on labor market dynamics in four ways. First, unlike most of the existing literature, it uses the Survey of Income and Program Participation (SIPP). This panel survey, with a 32-month window of observation, allows a more precise measure of employment flows than other data sources. It was found that one out of three workers experiences a job transition during the observation period. Second, it focuses on the state of California during an economic cycle. According to these estimates, the net decline in employment represents just 2.6 percent of all job rotations (separations offset by accessions), and gross job flows were as important during the downturn as they were during the economic expansion. Third, it estimates gross flows by sector, and finds significant variation in gross flows relative to employment across sectors of economic activity. Fourth, it examines the coexistence of cyclical and structural changes of California in the early 1990s. The results suggest a labor market link between structural changes and economic cycles. Copyright 2000 Gatton College of Business and Economics, University of Kentucky.

Eight: Contingent Workers in California

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The Economic Effects of Industrialized Trade in Armaments in the Major Western Industrialized and Developing Countries

We have used the Michigan Model of World Production and Trade to assess the impact of exports and imports of armaments (based on 1980 data) on sectoral trade and employment and other economic variables in the major Western trading countries. If the United States were to place a unilateral embargo on its arms exports and imports, we calculate that it would experience a comparatively small amount of employment displacement in the aggregate and that most of this displacement would occur in the transport equipment and electric machinery sectors. If all the major Western countries were to place a multilateral embargo on their arms trade, the sectoral effects on the United States would be similarly small. But the sectoral effects in several other industrialized and developing countries, measured as a percentage of sectoral employment, would be larger, indicating potential short-run adjustment problems in labor markets in some cases.Research Seminar in International Economics, Department of Economics, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100733/1/ECON199.pd

Benoit Revisited:

In the early 1970s, Emile Benoit shocked development economists by presenting positive cross-country correlations between military expenditure rates and economic growth rates in less developed countries (LDCs). This article reviews the long debate that has followed. While the studies surveyed here differ widely in method and focus, the empirical results point to similar conclusions. First, efforts at re-estimating Benoit's correlation coefficients for different samples and different time periods all fail to reproduce Benoit's results. Second, while some studies uncover evidence of positive effects of military spending through human capital formation and technological “spin-off” effects, models that allow military spending to affect growth through multiple channels find that, while military spending may stimulate growth through some channels, it retards it through others, and the net effect is negative. The most important negative effect is that higher military spending reduces national saving rates, thereby reducing rates of capital accumulation. The existence of positive effects of military spending on economic growth, as conjectured by Benoit, still cannot be ruled out. However, the recent econometric evidence points to the conclusion that these positive effects, if they exist, are small relative to the negative effects, and that, overall, military spending has a weak but adverse impact on economic growth in developing countries.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/67478/2/10.1177_0022002789033002007.pd