Webinar
11 March 2026, 4 PM MYT
Abstract:
This paper examines the macroeconomic effects of defense spending shocks in emerging markets and developing economies (EMDEs), with a focus on the Asia-Pacific over 1990–2023. Using cyclically adjusted defense shocks identified through local projections, the paper finds that defense spending generates modest but persistent positive output responses in EMDEs, while effects in advanced economies are weak or negative. Within EMDEs, multipliers are strongest in South Asia and weaker in East Asia, reflecting differences in labor intensity and capital intensity of procurement. Functional decompositions show that core military outlays and defense-related R&D drive the positive effects. State dependence is central: fiscal space, revenue capacity, financial development, institutional quality, and conflict exposure shape both the size and persistence of multipliers.
About the Presenter:
João Tovar Jalles is Senior Associate Professor of Economics at ISEG – University of Lisbon and a former economist at the IMF, OECD, ECB, and the Portuguese Public Finance Council. He holds a PhD in Economics from the University of Cambridge and is among the top 1% of economists worldwide according to the IDEAS/RePEc rankings. His research focuses on macroeconomics, fiscal policy, and applied econometrics, with particular emphasis on fiscal multipliers, public finance, and macro-financial linkages. He has published over 180 peer-reviewed articles in leading international journals and serves on the editorial boards of the European Journal of Political Economy and Public Finance Review.
