On the dynamics of the Israeli-Arab arms race
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.
Year of publication: |
2009
|
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Authors: | Abu-Qarn, Aamer S. ; Abu-Bader, Suleiman |
Published in: |
The Quarterly Review of Economics and Finance. - Elsevier, ISSN 1062-9769. - Vol. 49.2009, 3, p. 931-943
|
Publisher: |
Elsevier |
Keywords: | Arms race Middle East Israeli-Arab conflict Causality Generalized forecast error variance decomposition |
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