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Purpose: In this work, the authors analyze the dynamic interdependencies between military expenditures and the real economy for the period 1970–2018, and the authors' approach allows for the existence of dominant economies in the system. Design/methodology/approach: In this study, the authors employ a Network General Equilibrium GVAR (global vector autoregressive) model. Findings: By accounting for the interconnection among the top twelve military spenders, the authors' findings show that China acts as a leader in the global military scene based on the respective centrality measures. Meanwhile, statistically significant deviations from equilibrium are observed in most of the economies' military expenses, when subjected to an unanticipated unit shock of other countries. Nonetheless, in the medium run, the shocks tend to die out and economies converge to an equilibrium position. Originality/value: With the authors' methodology the authors are able to capture not only the effect of nearness on a country's military spending, as the past literature has documented, but also a country's defense and economic dependencies with other countries and how a unit's military expenses could shape the spending of the rest. Using state-to-the-art quantitative and econometric techniques, the authors provide robust and comprehensive analysis. [ABSTRACT FROM AUTHOR]

The present paper examines how the Chinese economy has managed to maintain its overall economic growth, and therefore its production, throughout the various crises, that is, the global crisis of 2007 and the E.U. structural crisis. The paper sets up a network‐global vector autoregressive (GVAR) model that is estimated simultaneously for all the economies in the model, capable of uncovering the dominant entities in the network system, in the time period 1992‐2017. According to our findings, the economies of the United States and EU17 are found to exhibit a dominant role in the GVAR system, which is confirmed using both node theory as well as econometric techniques. The results show that the Chinese economy is unaffected, in the long run, by unanticipated shocks in the dominant economies of the United States and EU17. [ABSTRACT FROM AUTHOR]