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Defence Spending and Growth in Cyprus: A Causal Analysis

Author

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  • Christos Kollias
  • Charis Naxakisb
  • Leonidas Zarangasb

Abstract

The causal relationship between economic growth and defence spending has attracted considerable attention and has been the subject of many empirical studies. Hoping to contribute to the existing pool of literature, this paper examines the relationship between military expenditure and growth in the case of Cyprus, a small island economy, for the period 1964-99. The findings reported suggest the presence of bi-directional instantaneous causality between defence spending and economic growth.

Suggested Citation

  • Christos Kollias & Charis Naxakisb & Leonidas Zarangasb, 2004. "Defence Spending and Growth in Cyprus: A Causal Analysis," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(3), pages 299-307.
  • Handle: RePEc:taf:defpea:v:15:y:2004:i:3:p:299-307 DOI: 10.1080/1024269032000166864
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    References listed on IDEAS

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    Cited by:

    1. Thomas Gries & Tim Krieger & Daniel Meierrieks, 2011. "Causal Linkages Between Domestic Terrorism and Economic Growth," Defence and Peace Economics, Taylor & Francis Journals, pages 493-508.
    2. Ageli, Mohammed Moosa & Zaidan, Shatha Mousa, 2012. "Consequential Effects of Defence Expenditure on Economic Growth of Saudi Arabia: 1970-2012," MPRA Paper 46590, University Library of Munich, Germany.
    3. Chien-Chiang Lee & Chun-Ping Chang, 2006. "The Long-Run Relationship Between Defence Expenditures And Gdp In Taiwan," Defence and Peace Economics, Taylor & Francis Journals, pages 361-385.
    4. Tsangyao Chang & Chien-Chiang Lee & Hsiao-Ping Chu, 2015. "Revisiting the Defense-Growth nexus in European countries," Defence and Peace Economics, Taylor & Francis Journals, pages 341-356.
    5. Ucal, Meltem & Karabulut, Gokhan & Bilgin, Mehmet Huseyin, 2009. "Military Expenditures and Inequality: Empirical Evidence from Israel," MPRA Paper 48643, University Library of Munich, Germany.
    6. Chien-Chiang Lee & Sheng-Tung Chen, 2007. "Non-Linearity In The Defence Expenditure - Economic Growth Relationship In Taiwan," Defence and Peace Economics, Taylor & Francis Journals, pages 537-555.
    7. J Paul Dunne, Eftychia Nikolaidou, 2005. "Military Spending and Economic Growth in Greece, Portugal and Spain," Frontiers in Finance and Economics, SKEMA Business School, pages 1-17.
    8. J paul Dunne & Beverly Edkins, 2008. "The Demand For Food In South Africa," South African Journal of Economics, Economic Society of South Africa, pages 104-117.
    9. Mehmet Akif Destek & Ilyas Okumus, 2016. "Military Expenditure and Economic Growth in Brics and Mist Countries: Evidence from Bootstrap Panel Granger Causality Analysis," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 14(2), pages 175-186.
    10. Glass, Anthony, 2009. "Government expenditure on public order and safety, economic growth and private investment: Empirical evidence from the United States," International Review of Law and Economics, Elsevier, vol. 29(1), pages 29-37, March.
    11. repec:spr:scient:v:94:y:2013:i:1:d:10.1007_s11192-012-0857-8 is not listed on IDEAS
    12. Serkan Künü & Sertaç Hopoðlu & Gürkan Bozma, 2016. "Conflict, Defense Spending and Economic Growth in the Middle East: A Panel Data Analysis," International Journal of Economics and Financial Issues, Econjournals, pages 80-86.
    13. Kalyoncu, Huseyin & Yucel, Fatih, 2005. "An analytical approach on defense expenditure and economic growth: the case of Turkey and Greece," MPRA Paper 4262, University Library of Munich, Germany, revised 2006.
    14. Mohammad Reza Farzanegan, 2014. "Military Spending and Economic Growth: The Case of Iran," Defence and Peace Economics, Taylor & Francis Journals, pages 247-269.
    15. Mohammad Reza Farzanegan, 2014. "Military Spending and Economic Growth: The Case of Iran," Defence and Peace Economics, Taylor & Francis Journals, pages 247-269.
    16. Joanne Evans & Eleftherios Goulas & Paul Levine, 2007. "Military Expenditure And Migration In Europe," Defence and Peace Economics, Taylor & Francis Journals, pages 305-316.
    17. W. Robert J. Alexander, 2015. "The Keynesian IS-MR Model and Military Spending," Defence and Peace Economics, Taylor & Francis Journals, pages 213-221.
    18. Lee, Chien-Chiang & Chang, Chun-Ping, 2005. "Structural breaks, energy consumption, and economic growth revisited: Evidence from Taiwan," Energy Economics, Elsevier, vol. 27(6), pages 857-872, November.
    19. Chen, Pei-Fen & Lee, Chien-Chiang & Chiu, Yi-Bin, 2014. "The nexus between defense expenditure and economic growth: New global evidence," Economic Modelling, Elsevier, vol. 36(C), pages 474-483.
    20. Hirnissa, M.T & Habibullah, M.S. & Baharom, A.H., 2008. "Military and Economic Growth in ASEAN-5 Countries," MPRA Paper 13108, University Library of Munich, Germany.

    More about this item

    Keywords

    Cyprus; Military expenditure; Causality; Cointegration; Economic growth; Structural breaks; JEL Code: H56;

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

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