Forecasting the Defense Budget and Assessing Its Impact on Economic Growth: An Empirical Study for Bangladesh

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The analysis results indicate a positive correlation between the defense budget and GDP growth, along with the inflation rate, suggesting economic growth can drive defense spending.
Key metrics such as the F statistic of 12.28744 exceed critical values, indicating a significant long-term correlation between the defense budget and macroeconomic factors.
Using the Autoregressive Distributed Lag model, this study examines long-term and short-term dynamics affecting defense budget allocations over three decades from 1990 to 2020.
The Error Correction Model shows 51.6% of any short-term disequilibrium in the defense budget is corrected over time, emphasizing the importance of economic considerations in budget planning.

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Empirical analysis predicts defense budget trends in Bangladesh, showing economic factors significantly influence allocations.

Sobhana Jahan (2025) studied this question.

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