The Defence Spending-External Debt Nexus In Ethiopia
The aim of this paper is to examine the impact of defence spending and income on the evolution of Ethiopia's external debt over the period 1970-2005. Using the bounds test approach to cointegration and Granger causality tests, we find a long run and a causal relationship between external debt, defence spending and income. Defence spending had a positive and a significant impact on the stock of external debt while income had a negative and a statistically significant impact on external debt. Our findings suggest that an increase in defence spending contributes to the accumulation of Ethiopia's external debt, while an increase in economic growth helps Ethiopia to reduce its external debt.
Volume (Year): 20 (2009)
Issue (Month): 5 (October)
|Contact details of provider:|| Web page: http://www.tandfonline.com/GDPE20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GDPE20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wolde-Rufael, Yemane, 2005. "Energy demand and economic growth: The African experience," Journal of Policy Modeling, Elsevier, vol. 27(8), pages 891-903, November.
- J. Paul Dunne † & Sam Perlo-Freeman ‡ & Aylin Soydan �, 2004.
"Military expenditure and debt in small industrialised economies: A panel analysis,"
Defence and Peace Economics,
Taylor & Francis Journals, vol. 15(2), pages 125-132, April.
- J Paul Dunne & Sam Perlo-Freeman & Aylin Soydan, 2003. "Military Expenditure and Debt in Small Industrialised Economies: A Panel Analysis," Working Papers 0306, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
- M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
- Lutkepohl, Helmut, 1982. "Non-causality due to omitted variables," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 367-378, August.
- Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
- Paresh Kumar Narayan & Russell Smyth, 2007. "The Military Expenditure-External Debt Nexus: New Evidence From A Panel Of Middle Eastern Countries," Monash Economics Working Papers 17-07, Monash University, Department of Economics.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- J. Paul Dunne a,† & Sam Perlo-Freeman ‡ & Aylin Soydan �, 2004.
"Military expenditure and debt in South America,"
Defence and Peace Economics,
Taylor & Francis Journals, vol. 15(2), pages 173-187, April.
- Pesaran, M. H. & Shin, Y., 1997.
"Generalised Impulse Response Analysis in Linear Multivariate Models,"
Cambridge Working Papers in Economics
9710, Faculty of Economics, University of Cambridge.
- Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
- M. Shahe Emran & Forhad Shilpi & M. Imam Alam, 2007. "Economic liberalization and price response of aggregate private investment: time series evidence from India," Canadian Journal of Economics, Canadian Economics Association, vol. 40(3), pages 914-934, August.
- Christos Kollias † & George Manolas & Suzanna-Maria Paleologouc, 2004. "Military expenditure and government debt in greece: Some preliminary empirical findings," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 189-197, April.
- John Loizides & George Vamvoukas, 2005. "Government expenditure and economic growth: Evidence from trivariate causality testing," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 125-152, May.
- Selami Sezgin, 2004. "An empirical note on external debt and defence expenditures in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 199-203, April.
- Erdal Karagol & Selami Sezgin, 2004. "DO defence expenditures increase debt rescheduling in Turkey? probit model approach," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(5), pages 471-480.
- Caporale, Guglielmo Maria & Pittis, Nikitas, 1999. " Efficient Estimation of Cointegrating Vectors and Testing for Causality in Vector Autoregressions," Journal of Economic Surveys, Wiley Blackwell, vol. 13(1), pages 1-35, February.
- GÃ¼lay GÃ¼nlÃ¼k-Senesen †, 2004. "The role of defence on external indebtedness: An assessment of turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 15(2), pages 145-156, April.
- James Ang, 2007. "Are saving and investment cointegrated? The case of Malaysia (1965-2003)," Applied Economics, Taylor & Francis Journals, vol. 39(17), pages 2167-2174.
- Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
- Erdal Karagol, 2005. "Defence expenditures and external debt in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 16(2), pages 117-125.
- Erdal Karagol, 2006. "The Relationship Between External Debt, Defence Expenditures And Gnp Revisited: The Case Of Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 17(1), pages 47-57.
- Ang, James B., 2008. "Economic development, pollutant emissions and energy consumption in Malaysia," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 271-278.
When requesting a correction, please mention this item's handle: RePEc:taf:defpea:v:20:y:2009:i:5:p:423-436. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.