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Structural Breaks In Military Expenditures: Evidence For Egypt, Israel,Jordan And Syria

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  • Aamer S. Abu-Qarn

    (Dept. of Economics, Ben-Gurion University of the Negev, Israel)

  • Suleiman Abu-Bader

    (Dept. of Economics, Ben-Gurion University of the Negev, Israel)

Abstract

This paper endogenously determines the timing of structural breaks in military expenditures and military burdens for the major parties involved in the Israeli-Arab conflict, namely Egypt, Israel, Jordan, and Syria over the period 1960-2004. Utilizing a test proposed by Vogelsang (1997), we find that all these countries experienced structural breaks, though at different periods in the late 70s and during the 80s. These structural breaks mark a sharp decline in the military burden that can be attributed to the peace talks that were initiated shortly after the 1973 war. When applying the Bai and Perron (1998, 2003) multiple structural break tests we detect two structural breaks for every country. The first break occurred during the 60s and demonstrated a significant rise in the military burden prior to the 1973 war, whereas the second break occurred in the late 70s and during the 80s and was characterized by a sharp decline in the military burden following the instigation of peace negotiations.

Suggested Citation

  • Aamer S. Abu-Qarn & Suleiman Abu-Bader, 2007. "Structural Breaks In Military Expenditures: Evidence For Egypt, Israel,Jordan And Syria," Working Papers 0704, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:0704
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    References listed on IDEAS

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    Cited by:

    1. Abu-Qarn, Aamer S. & Abu-Bader, Suleiman, 2009. "On the dynamics of the Israeli-Arab arms race," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(3), pages 931-943, August.
    2. Ucal, Meltem & Karabulut, Gokhan & Bilgin, Mehmet Huseyin, 2009. "Military Expenditures and Inequality: Empirical Evidence from Israel," MPRA Paper 48643, University Library of Munich, Germany.
    3. Ryan R. Brady & Victoria A. Greenfield, 2010. "COMPETING EXPLANATIONS OF U.S. DEFENSE INDUSTRY CONSOLIDATION IN THE 1990s AND THEIR POLICY IMPLICATIONS," Contemporary Economic Policy, Western Economic Association International, vol. 28(2), pages 288-306, April.
    4. Cem Saatçioðlu & Levent Korap, 2007. "Turkish Money Demand, Revisited: Some Implications For Inflation And Currency Substitution Under Structural Breaks," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 21(1+2), pages 107-124.

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    More about this item

    Keywords

    Military Expenditures; Military Burden; Middle-East; Israeli-Arab Conflict; Structural Breaks.;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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