J Paul Dunne () (School of Economics, University of the West of England) Samuel Perlo-Freeman () (School of Economics, University of the West of England) Ron P Smith () (Birkbeck College, London)
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This paper has considers the interpretation of the empirical results of the developing literature on the demand for military spending that specifies a general model with arms race and spillover effects and estimates it on cross-section and panel data. It questions whether it is meaningful to talk of an ‘arms race’ in panel data or cross-section data, and suggests that it may be more appropriate to talk about the relevant variables – aggregate military spending of the ‘Security Web’ (i.e. all neighbours and other security-influencing powers) and the aggregate military spending of ‘Potential Enemies’– as acting as proxies for threat perceptions, which will reflect both hostility and capability.
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Paper provided by University of the West of England, School of Economics in its series Discussion Papers with number
0707.
Find related papers by JEL classification: H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
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