Arms race and economic growth: The case of India and Pakistan

Date

2006-02-01

Author

Yildirim, J
Ocal, N

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

340
views

0
downloads

The hostility between India and Pakistan is believed to have led to an arms race between the two countries, which might have contributed to their retarded economic growth. This paper investigates this twin problem of arms race and economic growth for the time period 1949 - 2003. The empirical results suggest that there is a mutual causal relationship between the military expenditures of India and Pakistan. Even though military expenditure does not Granger cause economic growth in Pakistan, there is causality from military expenditure to economic growth in India. A VAR analysis revealed that military expenditure hinders economic growth in India in the long-run, but it has a growth promoting effect in the short-run.

Subject Keywords

Economics and Econometrics, Social Sciences (miscellaneous)

URI

https://hdl.handle.net/11511/65344

Journal

DEFENCE AND PEACE ECONOMICS

DOI

https://doi.org/10.1080/10242690500369231

Collections

Department of Labour Economics and Industrial Relations, Article

Suggestions

OpenMETU
Core

ARMS RACE BETWEEN TURKEY AND GREECE: A THRESHOLD COINTEGRATION ANALYSIS Öcal, Nadir; Yildirim, Juelide (Informa UK Limited, 2009-01-01) The ongoing Turkish-Greek antagonism has triggered the interest of defense economists to investigate the various aspects of the arms race between Turkey and Greece. However, empirical studies examining the long-run relationship between the military expenditures of the two countries offer little evidence in favor of such an interaction. This paper attributes the poor results of the previous literature to the adherence to linear cointegration techniques and argues that if the adjustment towards long-run equil...
Financial development, exchange rate regimes and the Feldstein-Horioka puzzle: evidence from the MENA region Özmen, Erdal (Informa UK Limited, 2007-04-01) This article investigates whether the Feldstein and Horioka (1980) argument on domestic saving-investment relationship is supported by the data of the countries in the Middle East and North Africa region when financial development levels and exchange rate regimes are taken into account. To this end, we employ both the Auroregressive Distributed Lag bounds cointegration test and panel mean group procedures. The results support the view that a successful international financial integration requires compatible...
NATO-Russia relations in the post-Soviet era : a new relationship inthe making? Ateş, Sema; Tanrısever, Oktay Fırat; Department of Eurasian Studies (2004) This thesis attempts to portray the recent course of NATO-Russia relations in the post-Soviet era, especially in terms of the issue of NATO enlargement. In this thesis NATO has been considered not as military alliance but a security community in the sense that probably no NATO member would seriously consider the use of military force as a means of problem solving among themselves. Besides this thesis examines the current state of NATO and traces its transformation from the end of the Cold War to the post Se...
Does Income Inequality Derive the Separatist Terrorism in Turkey? Derin Güre, Pınar (Informa UK Limited, 2014-05-04) Separatist terrorism has been a severe problem for Turkey since the mid-1980s. The conventional wisdom contends that economic deprivation in southeastern Turkey is the fundamental reason for the long-running battle against the Kurdish rebels. Considering that there is limited empirical literature on the roots of terrorism in Turkey, yielding conflicting results about the claim that the main cause of terrorism is deprived economic conditions, this study aims to answer whether there is a causal relationship b...
The impact of military spending and income inequality on economic growth in Turkey Tongur, Unal; Elveren, Adem Yavuz (Informa UK Limited, 2016-05-03) An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings...

Citation Formats

J. Yildirim and N. Ocal, “Arms race and economic growth: The case of India and Pakistan,” DEFENCE AND PEACE ECONOMICS, pp. 37–45, 2006, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/65344.