Economic Impact of the Ministry of Defence's Budget: Methodological Design and Results for the Spanish Economy

Abstract

This article analyses the economic impact of the expenditure budget of the Spanish Ministry of Defence (MoD) and its Autonomous Agencies (AA), distinguishing direct, indirect and induced effects. The input-output methodology is used to find intersectoral effects on the rest of the economy. The article quantifies the economic impact in terms of production, gross value added (GVA), employed population, tax revenue, and also in terms of its contribution to the gross domestic product (GDP) of Spain in 2010. The results show that the activity of the MoD and AA generates 1.2% of the country's GDP and 1.7% of total employment in that year.