The dynamic relationship between military expenditure, environmental pollution, and economic growth in G7 countries: A wavelet analysis approach

Abstract

This study applies wavelet analysis to examine the interplay between treadmill of destruction theory and environmental Kuznets curve theory in G7 countries over the period 1970–2018. The results indicate that, in the short term, co-movement and causality exist between military expenditure and environmental pollution at different frequencies and times. Positive causality runs from military expenditure to environmental pollution in Italy, the United Kingdom, the United States, Canada, and Germany in different sub-periods. After adding economic growth as a control variable, positive causality runs from military expenditure to environmental pollution in Italy, the United Kingdom, Japan, the United States, Canada, and France in different sub-periods. Decision-makers can refer to the empirical results to consider the direction of policy and managerial implications at macroeconomic and microeconomic levels.