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What is Spline Function

Chapter 23

Handbook of Research on Military Expenditure on Economic and Political Resources

Spline functions are defined as piecewise polynomials of degree n. Regression of such function is an application of linear regression technique in the presence of “knot” (or, structural break) using a regime dummy variable.

Published in Chapter:

Trade-Off Between Defense and Development: A Time Series Study in India

Maniklal Adhikary (Burdwan University, India) and Anindya Bhattacharya (Netaji Mahavidyalaya Arambagh, India)

Source Title: Handbook of Research on Military Expenditure on Economic and Political Resources

DOI: 10.4018/978-1-5225-4778-5.ch023

Abstract

This chapter looks into the existence and the nature of relationship between defense expenditure and GDP and development expenditure for Indian economy for last 30 years (1987-2016). Using Spline function regression technique and single equation regression approach, it concludes that defense expenditure is not significantly contributing in explanation for changes in GDP growth and development expenditure and its components. Further, defense expenditure shows significant structural breaks in the year 2000, which might be attributed to exorbitant hike in the defense expenditure data during Kargil War in 1998. Considering all these rises in defense expenditure, it is to an extent convenient to find the result that this has neither affected economic growth nor development expenditures in a significant manner.

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