The Journal of International Economic Policy

20

Authors: Zoryana Lutsyshyn, Natalia Kravchuk

From the compositional point of view, research on this topic has revealed two main directions: (1) an analysis of global development asymmetry that has activated gravitational processes in geo-economic space; and (2) a direction that focuses on the profound study of the causes for heterogeneity in geo-economic space and divergence in global development under the influence of gravitational factors of nature on the endogenousexogenous axis. Systemic determinants of gravitational processes are revealed in geo- economic space and the asymmetry of global activate ravitional processes in geo-economic space are observed, and methodological interconnectedness coinfluence of two complementary determinants of global development – convergence and divergence and the contradiction between them are examined, which at the same time underlie the inevitable internal contradictions of the process, creating conditions for further configuration of the «new globalization community», which is built on the principles of nonlinear dynamics and logic gravitational processes in geo-economic space.Taking into account the relevant uncertainties, the attention is focused on the isolation of several myths around which the debate that has important methodological significance in the context of the current global inter-system transformations is held. Geostrategic matrix divergence of global development is produced,which is based on techniques which incorporated cluster analysisthat are built on linguistic variables and integrated analysis of the key trends of country and global development geostrategic position of Ukraine in geo-economic space in the projection on the issues of global inter-system transformations isoutlined .It is proved that the level of gravity load increases in the deepening of the global asymmetries , and that the current global transformation is not yet complete, and polycentric new architecture geospace is not formed. In the near future we should expect the growth of gravitational processes in geo-economic space under the influence of fragmentation in information technology development countries, worsening energy problems, strengthening of the environmental risks and disasters, adverse trends sociodemographic. The divergence of global development will be strengthened as institutional «failure» and socio-cultural constraints. These aspects should be the subject of research and theoretical basis for the formation of new approaches to global development.

21

Authors: Viktoriia Gurova

The paper represents a research of theoretical principles for determining national innovation systems, as well as analyzes performance results displayed by national innovation systems of the leading countries in the global innovation space, while also describing characteristic features thereof and formulating recommendations for NIS build-up based on the same, implementation of which should serve as the basis of the national innovation system effective performance. It has been determined that at the current stage of global economy development such factors as science, technology and innovation play an important role in formation of a competitive economy. It has been established that the overall funding level with respect to science proves one of the key characteristics of an innovative country, and therefore NIS performance analysis was carried out based on the national expenditure indicator regarding research and development as well as on the country's position in the Global Innovation Index. The analysis carried out showed that the NISs of certain countries were more efficient than those of the others due to peculiarities of the innovative system elements that can be further referred to as determinants of building an effective national innovation system of a country.

25

Authors: Ahmed Shahid, Ismail Saba

This paper has made an attempt to examine relationship between military expenditure and economic growth using 56 country panel data spanning over 1995—2011. Panel fixed effect model has been estimated for all 56 countries and sub-groups classified on the basis of World Bank income criteria. The results of this study indicate a positive effect of military expenditure on economic growth but this positive effect is negligible compared to the alternative uses of scare resources on non-military expenditure. Thus, the effect of military expenditure on economic growth is very low compared to the effect of expenditure on capital formation, hence military expenditure as a sub-optimal means of increasing economic growth compared to alternative uses of government spending on formation of fixed capital. This study raises an important argument of huge opportunity cost of military expenditure. The present study concludes that the boosting of economic growth through higher military expenditure is neither effective nor efficient way of achieving higher growth in the economy.