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The Military Expenditure-External Debt Nexus: New Evidence From A Panel Of Middle Eastern Countries

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  • Paresh Kumar Narayan
  • Russell Smyth

Abstract

This paper examines the impact of military expenditure and income on external debt for a panel of six Middle Eastern countries; namely, Oman, Syria, Yemen, Bahrain, Iran, and Jordan, over the period 1988 to 2002. Using Pedroni's (2004) test for panel cointegration, we find that there is a long-run relationship between external debt, military expenditure and income. The estimated long-run elasticities suggest that an increase in military expenditure contributes to a rise in external debt, while an increase in income helps the Middle Eastern countries to pay off their external debt.

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File URL: http://www.buseco.monash.edu.au/eco/research/papers/2007/1707militarynarayansmyth.pdf
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Bibliographic Info

Paper provided by Monash University, Department of Economics in its series Monash Economics Working Papers with number 17-07.

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Length: 28 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:mos:moswps:2007-17

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References

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Citations

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Cited by:
  1. Shahbaz, Muhammad & Shabbir, Shahbaz Muhammad & Butt, Muhammad Sabihuddin, 2011. "Does Military Spending Explode External Debt in Pakistan?," MPRA Paper 30429, University Library of Munich, Germany, revised 21 Apr 2011.
  2. Stylianou Tasos, 2012. "Economic Growth and Defense Spending in Greece, Turkey and Cyprus: Evidence from Cointegrated Panel Analysis," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 15(44), pages 163-182, June.
  3. Khalid ZAMAN & Qazi Shujaat MAHMOOD & Muhammad Mushtaq KHAN & Awais RASHID & Mehboob AHMAD, 2012. "An Empirical Investigation of External Debt - Military Expenditure Nexus in Bangladesh," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(1), pages 173-188, June.
  4. Yemane Wolde-Rufael, 2009. "The Defence Spending-External Debt Nexus In Ethiopia," Defence and Peace Economics, Taylor & Francis Journals, vol. 20(5), pages 423-436.

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