The Relationship Between The Economic Growth And Defense Spending:Theory And Evidence

National defense construction has been very essential to defend national security, and it has been also essential to Chinese economic development. In recent years, China has been through rapid economic development and the economic strength has been increasingly strong and international security situation is increasingly complex, increasingly urgent for the protection of the good momentum of economic construction as well as to create a good atmosphere in the economic environment, making China need the national defense construction. However, now the theme of the world is still peace and development, China should still view economic construction as the fundamental task. In this prerequisite, how to accelerate the building of national defense, how to coordinate the development of national defense and economic construction, to implement the scientific concept of development, China is currently facing a major issue. Base on Chinese actual conditions, to study the possibility of relationship between defense spending and economic growth, this study not only has theoretical significance, but also plays a practice guide at the aspect of the coordinated development of Chinese economic construction and national defense construction, and implementing the scientific concept of development. This paper discusses the relationship between Chinese economic construction and national defense construction through the combination of theoretical research and empirical research, qualitative and quantitative analysis. In the qualitative research section, this paper makes the scope of the concept of national defense construction clear, and has the conclusion that the proportion of the total value of the national economy should be in within a certain range, be conducive to the coordination of national defense and economic construction development through the world of historical data to determine a country’s defense spending; in addition, the analysis of the relationship between the national economy and defense spending, and focuses on the formation path of defense spending has the potential positive and the negative impact on the national economy. On the basis of qualitative research to verify through empirical analysis, to avoid a purely theoretical empty and fatigue, the quantitative part is started by the co-integration analysis, combined with the Threshold Autoregressive(TAR) and the Momentum-Threshold Autoregressive(M-TAR), Threshold Error Correction Model(T-ECM) and Granger Causality Test, the result is that there is a certain threshold in the relationship between national economic construction and national defense construction, the effect of situation more than and less than the threshold is different, but that the defense construction and economic construction has causal relationship is not very significant. Besides, this paper puts forward some national defense policies and proposals about how to coordinate the development of economic construction and the construction of the national defense and how to accelerate the pace of national construction, we must first clear the fundamental task of economic construction has not changed, but with the economic strength, must be vigilant awareness, and actively promote the national defense construction, focusing on the development of co-ordination between; Second, we must adapt to the times in defense spending structure, grasp the era of rapid development of today’s world of information technology, technological innovation characteristics, adjust the expenditure structure, increase investment in the information industry; addition to the establishment of defense expenditures and national income linkage mechanism, ensure that the increase in national income, while increasing.their defense investment, and to refine the micro level of defense spending budget and auditing mechanisms to ensure the efficient use of the amount of defense spending. This paper use a combination of theoretical analysis and empirical analysis, and draw some conclusion of the study, and to make policy recommendations for these conclusions, but due to time constraints and limited personal capacity, there is still a wide range of defects and drawbacks, Empirical Analysis span lack of relevant data of the study, just over50sample points, which makes the lag analysis not sufficiently validated; Second, this thesis studied only a horizontal contrast, in future studies, we can join the top five ordinary members or BRIC, to facilitate lateral comparative analysis; empirical model of this study are applicable to the actual conditions in China remains to be further analysis and confirmation. All in all, based on the research analysis of economic construction and national defense expenditures how to coordinate the development of the same time, try to use Threshold Autoregressive(TAR) and the Momentum-Threshold Autoregressive(M-TAR) model to provide appropriate policy recommendations and theoretical support for our country’s future defense construction, and provide some new research ideas and direction for the study of the future economic construction and national defense expenditure.