Revisiting the guns-butter tradeoff: a wavelet analysis of the US and Britain

This study applies continuous wavelet analysis to examine defense-education and defense-healthcare relations in the US Britain. It discovers four empirical patterns that have not been shown existing literature. First, defense-welfare tradeoff rarely occurs at cycles less than 6 years hence is a short-run phenomenon. Second, very noticeable bilateral tradeoffs between education defense can be detected. The effect, however, more pronounced direction from defense. Third, much likely occur relations. Fourth, structural change relationship occurred during 1960s, after which connection became primarily complementary. Together, established question assumption sector has dominant power budget allocation. They also raise new theoretical questions demanding future research efforts.