On the dynamics of the Israeli-Arab arms race

Aamer Abu-Qarn () and Suleiman Abu-Bader ()

The Quarterly Review of Economics and Finance, 2009, vol. 49, issue 3, 931-943

Abstract: This article investigates the causal relationships between the military expenditures and military burden of the four major sides of the Israeli-Arab conflict, namely, Egypt, Israel, Jordan and Syria over the period 1960-2004. We utilize both the causality test suggested by Toda and Yamamoto [Toda, H. Y., & Yamamoto, T. (1995). Statistical inference in vector autoregressions with possibly integrated processes. Journal of Econometrics, 66, 225-250] and the generalized forecast error variance decomposition method of [Pesaran, M. H., & Shin, Y. (1998). Generalized impulse response analysis in linear multivariate models. Economics Letters, 58, 17-29]. Our findings suggest weak causality that runs usually from Israel's to Arab's military spending. The strongest links are between Israel and Syria that are still in a state of enmity. No causality was detected between Israel's and Jordan's military spending.

Keywords: Arms; race; Middle; East; Israeli-Arab; conflict; Causality; Generalized; forecast; error; variance; decomposition (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Working Paper: ON THE DYNAMICS OF THE ISRAELI-ARAB ARMS RACE (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:49:y:2009:i:3:p:931-943

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