GDP Reduction Research Articles

The Promoting Effect of Green Bonds on Reducing Carbon Emission Intensity Through Energy Structure Transition

Climate change poses a significant threat to the sustainable development of all countries. The transition to low-carbon energy sources is a crucial strategy for reducing carbon emissions and mitigating climate change. We investigate the mediating role of clean energy consumption (EC) and fossil energy supply (ES) on the promoting of carbon emission intensity per unit of GDP (CO2/GDP) reduction by green bonds (GBs). We develop a mediating model to analyze how GB influences CO2/GDP reduction through EC and ES, utilizing panel data from 13 prefecture-level cities in Jiangsu province spanning the years 2007 to 2021. Additionally, we assess the model’s reliability through endogeneity and robustness tests. We find that GBs contribute to reducing CO2/GDP by facilitating the structural transition of energy supply and consumption. Furthermore, the development of GBs enhance the consumption of clean energy and plays a direct role in advancing the transition in structure of both energy supply and energy consumption. Notably, we observe heterogeneity in the effectiveness of GBs on CO2/GDP reduction across different regions. Therefore, it is imperative for the government to actively promote the development of GBs to achieve sustainable economic growth. Furthermore, both financial and energy policies should be tailored to align with the specific energy structures of various regions.

Food waste and the EU target: effects on the agrifood systems’ sustainability

ABSTRACT The reduction of food losses and waste is part of the 2030 Agenda Sustainable Development Goals (target 12.3) and, consequently, is one of the EU’s political priority in the field of circular economy. In this framework, the target 12.3 of the UN’s 2030 Agenda for Sustainable Development stated, by 2030, a not quantified reduction in post-harvest losses and a halving of food waste at the retail and consumers levels; while the EU Commission has recently set the target, by 2030, of reducing by 10% food losses occurred at the stage of processing and manufacturing and by 30% food waste occurred at the stage of retail and consumption. Food losses and waste should primarily be considered an expression of inefficiency of agricultural production processes determining several environmental, social and economic impacts. The quantification of food losses and waste is still an unsolved problem so much so that, in EU; currently available data are only related to the period 2020–2021 and, in many cases, are based on estimates and are not uniform in individual Member States. This makes reliable predictions of results achievable by the European Union particularly difficult. The aim of this paper is to analyze whether the plan of losses and waste reduction established by the EU Commission is able to both ensure the achievement of 2030 Agenda target 12.3 and to make a contribution to improving the sustainability of agri-food systems. In doing so, in addition to Eurostat data on losses and waste, the EU-Commission projections and the latest results of recent studies on environmental, social and economic impact of food losses and waste in EU were used, including indicators on hidden costs of agrifood systems developed by FAO. What observed shows that the EU-Commission reduction plan, if implemented, should result in a reduction of losses and waste inadequate for complying with the recommendation given by the target 12.3. Furthermore, the EU-Commission’s decision not to provide for losses reduction at the agricultural stage should significantly limit environmental benefits, given that much of the negative environmental impacts (GHG, land and water use, etc.) are ascribable to this stage as are, according to FAO estimates, hidden environmental costs. Besides limiting environmental benefits, the EU-Commission reduction plan, focusing only on the food losses and waste reduction in the final stage of supply food chain, could lead to negative social and economic impacts caused by a decline in the demand, which will reduce supply, jobs losses and GDP reduction. The conclusion on this, is that the reduction of food losses and waste is an issue that cannot be addressed separated but needs to be included in a wider program of integrated and complementary measures as a whole clearly aimed at realizing forms of circular economy.

Comparing Carbon Regulation Scenarios for BRICS and EAEU Economies Using a GTAP-E Model

The paper compares the economic effects of a national carbon tax with those of an emission trading system (ETS) between EAEU and BRICS countries over the medium term. Also included are Uzbekistan, which has observer status in the EAEU, and Turkmenistan, which is an EAEU trade and economic partner. The static computable general equilibrium model GTAP-E is employed. Targets for reducing emissions are formulated on the basis of the countries’ intermediate goals as stated in their respective submissions under the Paris Agreement. The resulting simulations show that, in terms of real GDP, an emission trading scheme would be more favorable than national taxation for countries such as Brazil, India, Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. However, for China, South Africa, Uzbekistan and Turkmenistan, resorting to an ETS would produce a comparatively greater reduction in GDP. Because the second group of countries has lower abatement costs than the equilibrium carbon price under an ETS, that scenario would permit those countries to reduce emissions by a greater amount and sell emission allowances. The analysis also shows which sectors would increase production after carbon regulation. A considerable increase in production and exports would occur for chemicals and for ferrous and nonferrous metals in several BRICS and EAEU countries. Although those industries are energy-intensive, the countries concerned could decrease emissions by reducing production in the energy or other sectors. These industries could benefit from potential joint comparative advantages in the context of declining demand for traditional energy sources. These findings should be valuable in devising integration policy.

Impact of renewable energy expansion policies on the economy, income distribution, and air pollution reduction

This study employs a recursive dynamic computable general equilibrium model to evaluate the consequences of renewable energy (RE) expansion policies in South Korea, focusing on their impact on the economy, income distribution, and air pollution reduction. It assumes a scenario in which RE generation constitutes 20% of the total electricity generation by 2030. Various scenarios are explored, including those with and without emission regulations and those considering increased productivity of RE technology. Key findings suggest that expanding RE policies stimulates labor demand and revitalizes upstream industries. However, its effectiveness depends on increasing the efficiency of RE technologies. Carbon regulation, such as emissions trading schemes, reduces greenhouse gases and air pollutants, with environmental benefits outweighing GDP reductions. It decreases income inequality, whereas policies to promote RE exacerbate it, requiring corrective measures. Nevertheless, productivity improvements in the RE sector enhance income distribution.

Economic Impacts of Projected White Oak (Quercus alba L.) Timber Supply in Kentucky: A CGE Model Analysis

Demand for high-quality white oak sawlogs in Kentucky has been increasing for decades. Concurrently, Kentucky is witnessing ecological shifts in the historically white oak-dominated forests, mirroring the structural changes in oak forests in the eastern US. This demand–supply dissonance presents a growing concern among stakeholders on the sustainability of white oak and its associated economic implications. In this context, the objective of this study was to assess the potential economic impacts of the projected white oak timber supply following an overall increased supply of white oak sawlogs but reduced supply of high-quality white oak sawlogs in Kentucky. Results generated from a dynamic computable general equilibrium (CGE) model indicate a cumulative present-value GDP reduction of USD 3.66 billion, a USD 0.71 billion decline in consumer welfare, and other sectoral contractions over 40 years (2018–2058). These results can be used to advocate for more proactive forest management practices to stabilize a sustained supply of high-quality white oak timber in Kentucky and beyond.

The Impact of Fiscal Policy on the Economic Growth of Nigeria

This research study examined “Impact of fiscal policy on the economic growth of Nigeria”. The study made use of Johansen Co-integration Test analysis to determine the long run relation between fiscal policy and economic growth of Nigeria. The data was sourced from CBN statistical bulletin for the period of 1990 to 2021. The research findings revealed that there is a linear relationship between Gross Domestic Product and Public Debt, Tax revenue and Government Expenditure, Public debt (PDBT) and Tax Revenue (TAX) were negatively related to GDP while Total Government Expenditure (TGE) is positively related to GDP; PDBT and TAX both have an inverse relationship with GDP meaning that increases in both variables have negative impact or lead to a reduction in GDP. Statistically; the t-statistics of the variables under consideration were significant and the overall estimates of the regression were statistically adequate and therefore shows the acceptance of alternative hypothesis of no co-integration of unstable long run relationship between Fiscal Policy and Economic Growth. It was recommended that; the Nigerian government to increase expenditure on economically viable investment to improve individual income through employment and increased output. Also Government expenditure should be well monitored and ensure that these expenditures are not diversified to individuals’ pockets. The Government should also avoid incessant unproductive debt and ensure the existing debits are properly serviced as and when due.

Resource efficiency and climate change policies to support West Asia's move towards sustainability: A computable general equilibrium analysis of material flows

The resources and energy sectors make a significant contribution to economic performance in the economies of West Asia. In this study we explore the effect ambitious policies for resource efficiency and greenhouse gas abatement would have on West Asian economies and what their contribution to environmental sustainability could look like. We employ the Global Trade and Environmental Resource Model (GTEM-Resource) to empirically assess the economic and environmental implications of global policy initiatives in the region. Results show that resource efficiency and greenhouse gas (GHG) abatement policies are complementary in their effects. Resource efficiency policies boost resource use productivity in the region, reduce all categories of material extraction based on sustainable consumption and production behaviour and also caused by trade, and foster economic performance. By contrast, GHG emission abatement policies have a small effect on resource productivity but drive significant GHG reductions that are accompanied by reduced economic performance. When these two policies are combined, real GDP in West Asia is projected to increase by 8% relative to business-as-usual by 2060, while resource extraction and GHG emissions levels in the region would decline dramatically by 40% and 50%, respectively. Saudi Arabia and the United Arab Emirates would be much better off, compared to other countries in the region, with large increases in real GDP and major reductions in GHG emissions and resource extraction levels. Findings suggest that technology development and climate mitigation policies would result in a win-win solution for all countries in West Asia, contributing to maintaining well-being and protecting the environment on regional and global scales. This shows that there is a pathway to economic prosperity for resource-rich countries and regions.

Evaluating the impacts of renewable energy promotion policies on sustainable development: A computable general equilibrium model approach

Previous research has examined the double-dividend effects of renewable energy expansion policies, but the impact of financing mechanisms used to support this expansion has been overlooked. To address this gap, our study analyzes the economy-wide impacts of renewable energy expansion policies in Korea, with a specific focus on financing mechanisms. We employ a recursive dynamic computable general equilibrium model that considers imperfections in labor markets, heterogeneous households, and various electricity generation technologies. Our analysis examines the effects of various financing options for renewable energy on economic growth, the labor market, and social welfare, both with and without emission regulations. Our results reveal a trade-off between efficiency and equality when it comes to financing renewable energy expansion. Specifically, we find that financing the expansion through a lump-sum tax is the most efficient option, resulting in the smallest reduction in GDP compared to the business-as-usual scenario. However, this option also has the greatest negative impact on income inequality, as it leads to an increase in skill premiums and capital prices, exacerbating income disparities between households. Our findings suggest that renewable energy expansion tends to be regressive, with low-income households bearing a relatively larger burden of the costs associated with the expansion. Policymakers need to consider a range of options for alleviating income inequality and labor market disparity, such as targeted subsidies or transfers, to ensure a fair and efficient transition to a sustainable energy system.

Вплив факторів маркетингового середовища на розвиток роздрібної торгівлі в Україні

Retail trade in Ukraine is an important branch of its economy and significantly affects the satisfaction of the population's needs for consumer goods. Based on the analysis of secondary marketing information, it was determined that the volumes of retail turnover of enterprises operating in the field of retail trade increased significantly in 2021 compared to 2013. The influence of changes in certain factors of the macro- and microenvironment on the functioning of retail trade enterprises of Ukraine was studied. It has been established that their development is positively influenced by the cultural environment and the scientific and technical environment. At the same time, the political environment (political instability due to military actions in Ukraine), the economic environment (decrease in the level of population income, inflation, reduction of GDP), the demographic environment (migration of the population, reduction in its number) have a significant negative impact on the functioning of retail trade enterprises of Ukraine. At the beginning of the full-scale invasion of Russia into Ukraine, as a result of the destruction of warehouses and shops in a number of regions of our country, the disruption of relations with suppliers, and the shortage of a number of goods, retail enterprises suffered significant losses. Having closed stores in temporarily occupied territories or where active hostilities are taking place, large retail chains in 2022 opened a number of new stores in the Western regions of Ukraine and in the city of Kyiv, significantly changing the territorial structure of retail trade. The destruction of manufacturing enterprises or the limitation of their capacities forces retailers to look for new suppliers of goods, reduce their product range, and optimize logistics. The functioning of retail trade enterprises was significantly affected by the COVID-19 pandemic. There was a significant increase in the number of online stores of food retailers, "click and collect", "click and drive" services appeared. Today, there is a sharp increase in the prices of goods, compared to the pre-war period, which, in the conditions of a reduction in the level of income of the population of Ukraine, limits the volume of their purchases in physical terms. Having slightly adapted to the new conditions, retail enterprises need to intensify their marketing activities to increase the volume of purchases by store visitors and expand their customer base.

Soft-linking a national computable general equilibrium model (ThreeME) with a detailed energy system model (IESA-Opt)

Top-down CGE models are used to assess the economic impacts of climate change policies. However, these models do not represent the technologies and sources of greenhouse gas emissions as detailed as bottom-up energy system models. Linking a top-down CGE model with a bottom-up energy system model assures macroeconomic consistency while accounting for a detailed representation of energy and emission flows. While there is ample literature regarding the linking process, the corresponding details and underlying assumptions are barely described in detail. The present paper describes a step-by-step soft-linking process and its underlying assumptions, using the Netherlands as a case study. This soft-linking process increases the Dutch energy demand levels in 2050 by 19.5% on average compared to assumed exogenous levels. Moreover, the GDP in 2050 reduces by 5.5% compared to the baseline economic scenario. Furthermore, we identified high energy prices as the primary cause of this GDP reduction in the soft-linking process.

Does carbon emission react to oil price shocks? Implications for sustainable growth in Africa

This study examines the asymmetric effect of oil price changes on CO2 emissions for 30 African countries from 1987 to 2019. Using the panel non-linear autoregressive distributive lag (NARDL) methodology, the study reveals that an asymmetric relationship exists between oil price and CO2 emission as positive changes in the oil price are associated with a reduction in CO2 emissions. The negative change is also found to be associated with an increase in CO2 emission across the panel countries. In addition, in the long run, the degree of CO2 emission response to positive changes in oil price is more in oil-importing countries relative to oil-exporting countries. While CO2 emission response in oil-exporting countries responds more to negative changes in oil prices than in oil-importing countries. When we examine the response of GDP to a reduction in CO2 emission, we found that while a negative change in CO2 is associated with an increase in GDP in oil-importing countries, negative changes in CO2 emission significantly lead to a reduction in GDP in net oil-exporting countries. The study suggests strengthening the call for carbon emission reduction, especially in oil-exporting countries as oil price does not exhibit enough push factor towards the mitigation of CO2 emission in the continent.

Efficiency Assessment and Strategic Insights for Enhancing Pharmaceutical Industry Performance in Pakistan: A Data Envelopment Analysis Approach

Pakistan's pharmaceutical sector, pivotal for GDP, employment, and poverty reduction, comprises 759 companies in dynamic growth. We employ Data Envelopment Analysis (DEA) to identify efficient firms in 2017-2018, showcasing DEA's superiority. Evaluating ten industry leaders, e.g., Merk, Abbott, and GSK, we assess variables like Assets, Liabilities, Sales, EPS, DPS, and ROE. High Noon excels in consistent efficiency, while others improved from 2017 inefficiencies. Sanofi, despite revenue, underutilized EPS, DPS, and ROE. The study emphasizes companies' global and national standings, offering revenue and resource optimization insights, and enhancing industry efficiency. Implementing suggestions aids firms and Pakistan's GDP, advancing the pharmaceutical sector. Valuable for international stakeholders to invest in Pakistan's pharmaceutical progress.

Impact of ecological restoration on ecosystem service trade‐offs: Insight from karst desertification control

AbstractEcological restoration programmes (ERP) contribute to greening and regulation service improvement. However, whether greening exacerbates the social‐ecosystem trade‐offs in a degraded ecoregion remains unclear. In this study, we chose South China karst, a global hotspot of greening (improvement of vegetation), as a case‐study. First, we analyzed the degree of greening in different ecoregions and the contribution of landscape to greening during 2000–2020. Second, we investigated the relationship between greening and indicators (land use, gross domestic product [GDP], and population distribution) and explored the relationship between regulation and provision over time. The results showed that the degree of greening in different ecoregions was different, although ERP played a positive role in greening. The rapid greening in degraded ecoregion was relevant to net forest expansion (26.79% of the conversion area), while the slow greening in a non‐degraded ecoregion was associated with net built‐up land expansion (25.81% of the conversion area). Forest expansion in a degraded ecoregion increased out‐migration and exacerbated the trade‐off between greening and GDP reduction, regulation and provision. Our study found that weak service supply in degraded ecoregion limited farming income, which forced farmers to migrate for work and abandon slopeland. In conclusion, the combination of retiring land and emigrating for work triggers land functional transformation and aggravates social‐ecosystem trade‐offs, but agroforestry can mitigate these trade‐offs. Despite there are limitations in the quantification of population migration, it still provides new insight for the next stage of ERP.

КОНЦЕПТУАЛЬНІ ОСНОВИ РОЗВИТКУПОТЕНЦІАЛУ ПІДПРИЄМСТВ ОБОРОННО-ПРОМИСЛОВОГО КОМПЛЕКСУ В ЕКОНОМІЧНОМУ ЗРОСТАННІУКРАЇНИ

As for objectives, it was taken into consideration the fact that due to the military state of Ukraine caused by wide-broaden war actions and aggression of Russian federation, economy of the country is characterized by reduction of production volumes, GDP and profitability. Accordingly, it was underlined the importance of industrial increase of national producers, and the right way to solve this problem is to activate production growth of defense industrial complex. In this case, it is significant not only for economy, but military forces of Ukraine supply. Results. On the basis of analysis of production activities of defense industrial enterprises through recent years, especially since 2014 when the Crimea territory was annexed by Russia and Donbas region military actions started, it was defined the level of its production and economic potential that deals with high, normal and low points. It allowed understanding if Ukraine’s defense industrial complex has possibilities to fulfill economic growth and military forces supply in particular. Further, it was presented analysis of international place of Ukraine’s defense industrial complex and its tendency through the years since 2014. It was set up that most of all Ukrainians enterprises characterized by high and normal production and economic potential that also deals with positive demand on international market of weapons and ammunition. In order to describe if there were started the necessary strategies, programs, plans and actions on state, regional and administrative levels, it was systematized the list of actual and important documents. In the end, it was made the scheme of conceptual basis of production potential development of defense industrial enterprises in the economic growth of Ukraine. The core elements were proposed as government defense order programs, innovations, foreign investments, system of monitoring and guarantees for partners and national producers, activation of accompanying supporting branches of Ukraine’s economy. Conclusions. In order to get out of recession, increase GDP and achieve the appropriate level of economic growth, it is significant to activate both quality and capacitive volumes of defense industrial complex production that can become as catalyst for development of all spheres of national reproduction in Ukraine. As for export volumes, during the entire duration of war actions, military state and restoration of safety positions, it is advisable to limit it, and to extend only those foreign trade contracts that are long-term and strategically valuable for integration of Ukraine into European Union.

Macroeconomic and distributive effects of increasing taxes in Spain

I assess the macroeconomic and redistributive effects of tax reforms aimed at increasing tax revenue in Spain. To this end, I develop a theory of entrepreneurship that mimics key facts on the wealth and income distribution in Spain. I find two reforms that raise fiscal pressure in Spain to the average value among countries in the Euro area. The first reform involves doubling the average effective tax rate on labor and business income for all individuals whose income is above a threshold level. I find that this reform reduces the inequality in after-tax income, wealth, and consumption. However, it implies a substantial GDP reduction. The second reform increases the flat tax rate on consumption by fifteen percentage points. While this reform does not reduce long-run output, it does not decrease household inequality. All in all, the desirability of the two reforms depends on the government’s preferences for reducing inequality at the expense of aggregate output losses.

International Debts and Implications on Ghana’s GDP Growth. Annual time series data (1980-2014)

Development projects are at the heart of government borrowing, with the goal of transforming the economy. However, excessive borrowing has resulted in a massive debt for Ghana. As a result, this research aims to examine, using annual time series data, the trends and effects of Ghana's external debt and service on GDP growth from 1980 to 2014. Aside from GDP, the variables that were analyzed included gross domestic investment, population, foreign direct investment, openness to trade, and the ratios of external debt to GDP and the percentage of GDP used to service that debt. Exogenous Solow growth models were used to examine the effects of external debt burden on GDP growth separately from those of the standard Solow growth model. Two different models are being used, one to look at what is causing an increase in the country's external debt and how that will affect GDP, and the other to look at how servicing that debt will affect GDP growth. OLS estimation method was used, backed by Bruesch-Godfrey test, Koenker-Basset (KB) test statistics, Cobb Douglass estimation function, and STATA statistical package (version 2012) for the regression analysis. Tests for autocorrelation and heteroscedasticity were passed by the models. For both models, the R2 value and F-statistic (Prob>F 0.000 is less than 0.05) indicate that the independent variables account for approximately 99.51 percent of the GDP variation. For the sake of comparison, we can see that all but one parameter in both models is statistically significant (the population coefficient in the second model). According to Simon (1987), Todaro and Smith (1990), and others, GDP and population (POP) have a positive and significant relationship, as do gross domestic investment (INV) (2012). Foreign direct investment (FDI), the external debt ratio (EXD), and the debt service on the country's external debt are all positive, as predicted a priori; however, all four of these variables are negative. Despite this, the coefficient of external debt to GDP is higher than the coefficient of debt service on external debt. An increase in external debt of 1 percent of GDP results in a 0.2285 percent reduction in GDP, whereas an increase in external debt servicing costs results in a 0.069669 percent reduction in GDP. This means that Ghana's external debt should be constantly monitored by the government, and debt should not be allowed to exceed a maximum limit in order to avoid overhanging debt. The government must properly monitor funds to ensure that they are used only for the intended purpose. As a second step, the government of Ghana should concentrate on other strategic economic areas. Because of their high multiplier effect, investments in infrastructure, agriculture, and other sectors should be prioritized. As a result, the total amount of debt owed will be reduced. Finally, Ghana's economy can't solely rely on its external, or foreign, debts, which are always a drag on growth. To determine whether or not they need additional financing, the government should compare their economy's health to fiscal discipline, which governs fiscal policy.

Urban contraction in Liaoning Province

With the development of social economy, the current changes in the flow of people in the three eastern provinces and the development of cities show the trend of GDP reduction and population loss, which can be called urban contraction. Based on the changes of the population and GDP of 30 cities in Liaoning Province, this paper discriminates the types of urban development, further classifies the shrinking cities, explores the factors that affect their shrinking degree, summarizes different urban types and puts forward corresponding improvement strategies, and finally forecasts the future development and evolution of these cities.

Exchange rate regime in a crisis: The case of Azerbaijan

This study aims to substantiate the practicality of establishing a fixed exchange rate (FER) under external shocks to the Azerbaijani economy. Using regression analysis, principal component analysis, and the Granger causality test, we substantiated the inexpediency of a fixed FER for the manat (the national currency) due to: the ineffective fiscal and monetary policy of the state, weak integration into the U.S. economy, distrust of the manat in the population, and the weakness of currency hedging. Artificial retention of a FER will lead to devaluation and chronic economic recession (inflation growth, a decrease in real incomes of the population, a reduction of GDP per capita, and an increase in unemployment). It is substantiated that an increase in public confidence in the national currency should become the basis for the transition to a floating exchange rate (FER) for the manat as it will help to get the actual value of the manat.

Economic and financial consequences of war in Ukraine: analysis of development scenarios

Abstract The war affects the socio-economic state of Ukraine and is the cause of the deterioration of the economic situation of neighboring countries. Under such conditions, there is a need to carry out assessments of economic losses from the conduct of military operations and forecast the main economic indicators for the nearest period, taking into account the impact of the war. The purpose of the study is to calculate the losses to the economy, the destruction of residential facilities and critical infrastructure facilities in the first 100 days of the war, the assessment of the potential volume of the fall in GDP and the calculation of projected fiscal losses. The calculation of GDP reduction was based on the forecasts of the International Monetary Fund, the World Bank Group and the Government of Ukraine. The expected amount of GDP reduction is calculated using the GAP-analysis method, based on the forecasts made by these institutions in the prewar period, and the calculation of the level of GDP during the war. Based on the results of the conducted research, it was established that the economic losses from the war consist not only of the losses incurred and the reduction of GDP volumes, but also of the lost opportunities for development and unearned profits. In addition to the reduction in GDP, Ukraine’s losses are manifested in the increase in the level of public debt, the depreciation of the national currency, the reduction of gold and currency reserves, and the outflow of foreign direct investments3.

ThThe Impact of Military Expenditures on Economic Growth in Iraq: An Econometric Study (2005-2020)

Military expenditures in Iraq constitute a large proportion of public expenditures and are considered one of the factors of the financial deficit. However, they did not contribute positively to economic growth, which caused the misallocation of economic resources and the failure to exploit them in an efficient manner. The basic hypothesis of the study is that there is an inverse relationship between military expenditures and the economic growth in Iraq, and in order to achieve the aim of the study and verify its hypothesis the standard method of practical aspect using the model of ARDL is adopted, taking military expenditures, investment expenditures, the war of ISIS as independent variables, and economic growth as a dependent variable. The study has reached several important conclusions, most notably is the existence of a reverse relationship between military expenditures and economic growth as an increase in military expenditures by 1 percent leads to a reduction in GDP by (- 0.13- percent). In light of this, several recommendations have been made. The most important of which is the need to reduce military operational expenditures by reducing military forces, especially informal forces (military militias) as well as reducing corruption in the military sector, which drains large amounts of government budget.