Ridge Regression Analysis of the Defence-Growth Tradeoff in the United States

Multicollinearity is one of the major methodological problems in the study of the guns‐growth tradeoff. In this paper, we use ridge regression to separate the effects of individual variables influencing economic growth in the United States. Ridge is not a new method, but to the best of our knowledge, this is the first application of ridge regression to the study of national security or Defence and Peace Economics.

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