Defenсe industry and the structure of the national economy: impact on the economic growth

Investigation into the impact of military spending on the growth of the national economy leads to ambiguous results. Some studies show a significant positive relationship, others - weak or even negative one. The defence industry plays its role in the development of the economy. A significant part of the research on this issue is based on statistical analysis. In this paper, we make an attempt to investigate the role of military spending in the national economy of countries with a developed defence industry - China and the United States. Our method grounds the input-output tables. We present a three-sector model that proves the positive impact of the defence industry on the economy. At the same time, the scale of the effect in the case of the United States is about 3 times greater than in case of China. But in both countries, this effect decreased in 2015 compared to 2010.