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Modelling Greek - Turkish Rivalry: An Empirical Investigation Of Defence Spending Dynamics


  • George Georgiou
  • Panayiotis Kapopoulos
  • Sophia Lazaretou


Three models are used to test the widely held view that there is military rivalry between Greece and Turkey. The modelling is based on the work of McGuire (1977), Desai & Blake (1981) and a vector autoregression specification. Particular attention is paid to appropriate diagnostic tests, the long-run values and Granger causality. Empirical findings provide little corroboration of the view that there is an arms race between Greece and Turkey. Such results should not be entirely surprising. Rivalry can take many other forms, such as periodic exchanges of bellicose rhetoric; economic, political and diplomatic manoeuvering; lobbying within existing alliances; political, historical and cultural propaganda. Given that the statistical evidence provides little support for the view that there is an arms race between Greece and Turkey, there are possibly other explanations for their military expenditures. Therefore, on the empirical side, the most important issue for future research of the determinants of military expenditures in both countries would be the consideration of models that incorporate the impact of various strategic, political and economic factors which may be important determinants of defence spending.
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Suggested Citation

  • George Georgiou & Panayiotis Kapopoulos & Sophia Lazaretou, "undated". "Modelling Greek - Turkish Rivalry: An Empirical Investigation Of Defence Spending Dynamics," Working Papers 9411, University of Crete, Department of Economics.
  • Handle: RePEc:crt:wpaper:9411

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    References listed on IDEAS

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    Cited by:

    1. Christos Kollias & Suzanna-Maria Paleologou, 2003. "Domestic political and external security determinants of the demand for greek military expenditure," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(6), pages 437-445.
    2. Jurgen Brauer, 2002. "Survey and Review of the Defense Economics Literature on Greece and Turkey: What Have We Learned?," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(2), pages 85-107.
    3. J Paul Dunne, Eftychia Nikolaidou, 2005. "Military Spending and Economic Growth in Greece, Portugal and Spain," Frontiers in Finance and Economics, SKEMA Business School, vol. 2(1), pages 1-17, June.
    4. repec:kap:iaecre:v:18:y:2012:i:3:p:259-270 is not listed on IDEAS
    5. Muhammad Ramzan Sheikh & Muhammad Aslam, 2015. "Is There an Arms Race Between Pakistan and India? An Application of GMM," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(2), pages 35-51, July-Dec.
    6. Dunne J. Paul & Nikolaidou Eftychia & Smith Ron P., 2005. "Is there an Arms Race between Greece and Turkey?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 11(2), pages 1-37, November.
    7. Christos Kollias & Suzanna-Maria Paleologou, 2002. "Is there a Greek-Turkish arms race? Some further empirical results from causality tests," Defence and Peace Economics, Taylor & Francis Journals, vol. 13(4), pages 321-328.
    8. Dritsakis, N., 2004. "Defense spending and economic growth: an empirical investigation for Greece and Turkey," Journal of Policy Modeling, Elsevier, vol. 26(2), pages 249-264, February.
    9. Mary Michail & Nicholas Papasyriopoulos, 2012. "Investigation of the Greek – Turkish Military Spending Relation," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 18(3), pages 259-270, August.

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