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The overall consensus in the macro literature is that military expenditure reduces economic growth, except for some exceptional circumstances and countries, if all inter-relationships are adequately accounted for. However, defence also has major spin-offs particularly for economies with a relatively large Defence Industrial Base, DIB (also known as the defence industrial and technological base) which could have potential positive externalities for the civilian sectors in terms of scientific innovation and technological progress. In this paper we concentrate on economic growth and its links with the defence sector. It makes reference to the Israeli economy and military with special emphasis on the military industrial complex.JEL Codes: E32, G38, P43