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Abstract

This research aims to determine the direction of the causal relationship between military expenditure and economic growth in developed and developing countries with the strongest military powers based on Global Fire Power 2024 for the period 1978-2022. This research is quantitative research with secondary data. Military expenditure data was obtained from the Stockholm International Peace Research Institute (SIPRI), and economic growth data was obtained from The World Bank. The research model used is Pairwise Granger Causality Tests with the help of Eviews software to make testing easier. The results of this research show that in 21 developed countries, there is simultaneously a one-way causal relationship from military expenditures to economic growth. From 37 developing countries, it is simultaneously known that there is no causal relationship between military expenditures and economic growth.
Keywords: Military Expenditure, Economic Growth, Granger Causality.