Does Military Expenditure Spur Inflation? Autoregressive Distributed Lag (ARDL) & Causality Analysis for Nigeria

Abstract

This study  unfold the relationship between inflation and macroeconomic variables of military expenditure, exchange rate, economic growth proxy by gross domestic product and gross fixed capital formation. The finding revealed that military expenditure does not induce inflation in Nigeria and thus recommended that the current funding of the military sector should be sustained for effective combat readiness both internally and externally.

Key word: Military Expenditure, Inflation, Vector Error Correction Model, Granger Causality.