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The Relationships Between Oil, Critical Minerals, and Military Expenditure: Evidence from the U.S. and China

Author

Listed:
  • Luccas Assis Attílio

    (Departamento de Ciências Econômicas, Instituto de Ciências Sociais Aplicadas, Universidade Federal de Ouro Preto, Mariana 35420-000, Brazil)

  • Joao Ricardo Faria

    (Department of Economics, Florida Atlantic University, Boca Raton, FL 33431, USA)

  • Mauro Rodrigues

    (Department of Economics, University of Sao Paulo, São Paulo 05508-010, Brazil)

  • Emilson Silva

    (Department of Economics, University of Auckland, Auckland 1142, New Zealand)

Abstract

This paper investigates the interplay between oil, critical minerals, and military expenditure in the U.S. and China. The research goal is to evaluate how sensitive the military expenditure of these countries is to shocks in energy markets. It develops a stylized dynamic model of the arms race and conflict, with a particular focus on U.S.–China tensions surrounding access to these vital resources. Empirical analysis using VAR estimations reveals that: (1) shocks to China’s military spending prompt increases in U.S. military expenditure, whereas the reverse effect is not observed; (2) critical mineral production significantly influences China’s military spending; and (3) U.S. military expenditure is affected by both Chinese military spending and fluctuations in oil prices.

Suggested Citation

  • Luccas Assis Attílio & Joao Ricardo Faria & Mauro Rodrigues & Emilson Silva, 2026. "The Relationships Between Oil, Critical Minerals, and Military Expenditure: Evidence from the U.S. and China," Games, MDPI, vol. 17(3), pages 1-21, June.
    • Handle: RePEc:gam:jgames:v:17:y:2026:i:3:p:30-:d:1968673
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