摘要：Since Benoit's (1973) work, which argued that defense spending positively affects economic growth, the effects of defense spending on economic growth have been widely examined, and different theories have been developed. Linear models are generally used in the study of this topic. Considering that many economic variables may have a nonlinear generating mechanism, it is found that this is neglected in studies of defense spending and economic growth. This study examines the relationship between defense spending and economic growth using the panel threshold model for 17 OECD countries. According to empirical results, a linear relationship between defense expenditures and economic growth could not be observed. This result shows that the effect of defense spending on economic growth can change with the threshold value. The findings suggest that defense spending above (below) the threshold of 0.599 positively (negatively) influences economic growth.Key Words:Defense Spending,Economic Growth,OECD Countries,Panel Threshold Model.JEL Classification: H50, O40, C50.
