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The Relationship Between Military Spending and Black Market Premium in Greece: An ARDL Approach

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  • Alper Aslan

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    Abstract

    Recently, there are a few empirical studies relating to the military spending and other macro variables such as real exchange rate, unemployment rates, investment rates, budget, and inflation rates. We examine the relationship between military spending and black market premium, in the Greece using the autoregressive distributed lag approach for the time period 1954–1998. Our results implied that higher military spending leads to higher black market premium and we concluded that while military spending does not Granger cause black market premium in the short run, black market premium does Granger cause military spending in the short run. When we examine the long-run results, ELC model implies that almost 30 % of the disequilibrium of the previous year’s shocks adjusts back to the long run equilibrium. Copyright Springer-Verlag Wien 2012

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    File URL: http://hdl.handle.net/10.1007/s11300-012-0237-3
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    Bibliographic Info

    Article provided by Springer in its journal Transition Studies Review.

    Volume (Year): 19 (2012)
    Issue (Month): 2 (November)
    Pages: 155-161

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    Handle: RePEc:spr:trstrv:v:19:y:2012:i:2:p:155-161

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    Web page: http://www.springerlink.com/link.asp?id=112913

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    Related research

    Keywords: Military Spending; Black Market Premium; ARDL; Greece; H56; C22;

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    1. Smith, R P, 1977. "Military Expenditure and Capitalism," Cambridge Journal of Economics, Oxford University Press, vol. 1(1), pages 61-76, March.
    2. Jenn-Hong Tang & Cheng-Chung Lai & Eric Lin, 2009. "Military Expenditure And Unemployment Rates: Granger Causality Tests Using Global Panel Data," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(4), pages 253-267.
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    12. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
    13. Benoit, Emile, 1978. "Growth and Defense in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 26(2), pages 271-80, January.
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    15. Julide Yildirim & Selami Sezgin, 2003. "Military expenditure and employment in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(2), pages 129-139.
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