Consequential Effects of Defence Expenditure on Economic Growth of Saudi Arabia: 1970-2012

Mohammed Moosa Ageli, Shatha M Zaidan

Abstract


This study investigates the causality relationship between defence expenditures and Non Oil economic growth in Saudi Arabia over the period 1970-2012. Using Unit root tests, Johansen’s co-integration test and Granger Causality test. In this paper we found the existence of bi-directional causality relationship running from Non Oil-GDP to defence expenditure. The results show that, in Saudi Arabia, the model of defence expenditure is found to hold for Non Oil-GDP.


Full Text: PDF DOI: 10.5539/ijef.v5n2p155

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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