Aamer Abu-Qarn () (Department of Economics, Ben-Gurion University of the Negev) Suleiman Abu-Bader () (Department of Economics, Ben-Gurion University of the Negev)
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IThis 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 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 tests we detect two structural breaks for every country. 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 occurred in the late 70s and during the 80s and was characterized by a sharp decline in the military burden following the instigation of peace negotiations.
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Paper provided by Ben-Gurion University of the Negev, Department of Economics in its series Working Papers with number
231.
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Find related papers by JEL classification: H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
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