An Econometric Analysis of the Military Expenditure and External Debt in Argentina

Mete Feridun ()
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Mete Feridun: Faculty of Economics and Administrative Sciences, Cyprus International University, Postal: Haspolat-Lefkoşa, Cyprus, http://www.ciu.edu.tr/

Economia Internazionale / International Economics, 2005, vol. 58, issue 4, 391-403

Abstract: This study analyzes the Argentine Financial Crisis of 2001 through investigating the impact of military expenditure on external debt in Argentina. For this purpose, Granger-causality testing procedure is applied on yearly data between 1971 and 2002. Strong evidence emerged that military burden had no impact on the evolution of debt in Argentina: Results of Granger-causality test show that the null hypotheses of military expenditure does not granger cause external debt is not rejected. Results show no evidence of reverse causality either. This finding invalidates the hypothesis that military burden may be important in determining the evolution of debt in developing countries.

Keywords: Military spending; external debt; Argentine financial crisis; Granger-causality (search for similar items in EconPapers)
JEL-codes: F40 H56 O54 (search for similar items in EconPapers)
Date: 2005
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