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Structural Breaks in Military Expenditures: Evidence for Egypt, Israel, Jordan and Syria

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  • Abu-Qarn Aamer S

    ()
    (Ben-Gurion University of the Negev)

  • Abu-Bader Suleiman

    ()
    (Ben-Gurion University of the Negev)

Abstract

This paper endogenously determines the timing of structural breaks in military expenditures and military burdens for the major parties involved in the Israeli-Arab conflict, namely Egypt, Israel, Jordan, and Syria over the period 1960-2004. Utilizing a test proposed by Vogelsang (1997), we find that all these countries experienced significant structural breaks, though at different periods in the late 70s and during the 80s. These structural breaks mark a sharp decline in the military burden that can be attributed to the peace talks that were initiated shortly after the 1973 war. When applying the Bai and Perron (1998, 2003) multiple structural break test we detect two structural breaks for all countries. The first break occurred during the 60s and demonstrated a significant rise in the military burden prior to the 1973 war, whereas the second break corresponds to the aforementioned peace negotiations.

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Bibliographic Info

Article provided by De Gruyter in its journal Peace Economics, Peace Science, and Public Policy.

Volume (Year): 14 (2008)
Issue (Month): 1 (April)
Pages: 1-25

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Handle: RePEc:bpj:pepspp:v:14:y:2008:i:1:n:3

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Cited by:
  1. Abu-Qarn, Aamer S. & Abu-Bader, Suleiman, 2009. "On the dynamics of the Israeli-Arab arms race," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 931-943, August.
  2. Levent, Korap, 2007. "Turkish money demand, revisited: some implications for inflation and currency substitution under structural breaks," MPRA Paper 19479, University Library of Munich, Germany.
  3. Ucal, Meltem & Karabulut, Gokhan & Bilgin, Mehmet Huseyin, 2009. "Military Expenditures and Inequality: Empirical Evidence from Israel," MPRA Paper 48643, University Library of Munich, Germany.

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