Abstract
National security is essential priority for countries. It is obvious that resources distribution and allocation is one of the most important targets for governments. The Egyptian Armed Forces is one of the greatest armies in the Middle East and North Africa, and the major weapons stock in the whole area. As long as Egypt has realized the security threats surrounding, whether at the local or regional level, therefore Egypt has implemented many huge investments to modernize and train the armed forces, with average military expenditure reaching $3.8 billion during ((2020-2010.
This study aims at examining the impacts of military expenditure on economic growth in Egypt using Autoregressive distributed lag (ARDL) method. The paper hypothesizes that; first, military expenditure does not cause economic growth. Second, economic growth does not cause military expenditure. Basically, the study is testing causality between military expenditure and economic during the period (1971-2020) and, the study shows that there is a uni-directional causality running from economic growth to military expenditure, however no causality from military spending to economic growth is observed in the results. There is a Granger causality from general government final consumption expenditure to military expenditure.
Keywords : military expenditure, economic growth, general government final consumption expenditure and Autoregressive distributed lag (ARDL)