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The demand for Canadian defence expenditures

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  • Binyam Solomon

Abstract

This paper presents an analysis of the determinants of the demand for Canadian military expenditures through the estimation of a demand for defence expenditures model for the time period 1952-2001 using, among others, the auto-regressive distributed lag approach to cointegration (ARDL) to estimate and test cointegration and long run relationships. The findings suggest that Canadian defence spending is determined by NATO's (Europe) defence spending, that of the US to a lesser extent, relative price effects and opportunity cost considerations. In light of the fact that Canada's national, foreign and defence interests are tied to international organizations and bilateral arrangements, the results are not surprising.

Suggested Citation

  • Binyam Solomon, 2005. "The demand for Canadian defence expenditures," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(3), pages 171-189.
    • Handle: RePEc:taf:defpea:v:16:y:2005:i:3:p:171-189
    DOI: 10.1080/10242690500123380
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    References listed on IDEAS

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    1. Todd Sandler, 1993. "The Economic Theory of Alliances," Journal of Conflict Resolution, Peace Science Society (International), vol. 37(3), pages 446-483, September.
    2. Conybeare, John A C & Murdoch, James C & Sandler, Todd, 1994. "Alternative Collective-Goods Models of Military Alliances: Theory and Empirics," Economic Inquiry, Western Economic Association International, vol. 32(4), pages 525-542, October.
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    4. Binyam Solomon, 2003. "Defence specific inflation: A Canadian perspective," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(1), pages 19-36.
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    6. Todd Sandler & James C. Murdoch, 1990. "Nash-Cournot or Lindahl Behavior?: An Empirical Test for the NATO Allies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(4), pages 875-894.
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    Cited by:

    1. Justin George & Todd Sandler, 2021. "EU Demand for Defense, 1990–2019: A Strategic Spatial Approach," Games, MDPI, vol. 12(1), pages 1-18, February.
    2. 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, vol. 18(6), pages 537-555.
    3. Douch Mohamed & Solomon Binyam, 2018. "Status or Security: The Case of the Middle East and North Africa Region," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 24(3), pages 1-12, September.
    4. Karl Skogstad, 2016. "Defence budgets in the post-Cold War era: a spatial econometrics approach," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 323-352, June.
    5. Carlos Pestana Barros, 2016. "Country survey: Angola," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 423-432, June.
    6. Sheng-Tung Chen & Jyun-Wei Lai & Arwin Pang, 2015. "The effect of military service system change on the demand for military expenditure," Defence and Peace Economics, Taylor & Francis Journals, vol. 26(6), pages 623-633, December.

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