Abstract

This study investigates the causal relationship between military expenditure and economic growth in Bangladesh using data from 1980 to 2022. Aligning with methodologies employed in similar studies conducted in other countries, the study utilizes Granger causality tests and ARDL bound testing for cointegration analysis. The study findings reveal an inverse correlation between defense spending and economic growth, as well as at least one long-run equilibrium relationship among the variables. Specifically, the study finds a unidirectional causal link from military expenditure to economic growth. The results hold significant implications for policymakers, suggesting that reducing defense spending could potentially stimulate economic expansion.