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The Effects of Defence Spending Reductions: A CGE Estimation of the Foregone Peace Dividend in the Case of Greece

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  • Emmanuel Athanassiou
  • Christos Kollias
  • Stavros Zografakis

Abstract

With the collapse of bipolarity and the end of the East-West armaments race, defence budgets have shrunk and military expenditures across many countries have fallen, opening-up the prospect of potential beneficial economic spin-offs. In the case of Greece, a country with a higher than average defence burden, military spending has not exhibited similar downward trends as it has done in other members of NATO and the European Union. The paper, using a Computable General Equilibrium model, estimates through simulations the effects on the Greek economy had reductions in current defence spending been equal to the NATO average. The results from the CGE estimations suggest that a shift of expenditure from defence into non-defence public spending would have an appreciable beneficial impact.

Suggested Citation

  • Emmanuel Athanassiou & Christos Kollias & Stavros Zografakis, 2002. "The Effects of Defence Spending Reductions: A CGE Estimation of the Foregone Peace Dividend in the Case of Greece," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(2), pages 109-119.
    • Handle: RePEc:taf:defpea:v:13:y:2002:i:2:p:109-119
    DOI: 10.1080/10242690210972
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    1. Hee-Won Yang & Chan-Young Hong & Seong-Mun Jeong & Jeong-Dong Lee, 2012. "The military Expenditure and Economic Growth in the case of the South Korea : The dynamic Computational Equilibrium model in an Endogeneous Growth Perspective," EcoMod2012 4264, EcoMod.
    2. Gerassimos Bertsatos & Nicholas Tsounis, 2023. "Assessing the Impact of Trade Barriers on Energy Use in Turbulent Times: Current Conditions and Future Outlook for Greece," Energies, MDPI, vol. 16(15), pages 1-25, August.
    3. Yang, Heewon & Hong, Chanyoung & Jung, Sungmoon & Lee, Jeong-Dong, 2015. "Arms or butter: The economic effect of an increase in military expenditure," Journal of Policy Modeling, Elsevier, vol. 37(4), pages 596-615.

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