This paper applies a two-step Generalized Method of Moments (GMM) to re-examine the causality between defense burden (MB) and real GDP (RY) for 137 countries. The findings indicate that a short-run causality running from MB to RY is found in lower-middle- and high-income countries and that from...

The purpose of this paper is to re-investigate issues in purchasing power parity (PPP) convergence using a threshold vector error-correction model with deutschmark-based exchange rates. We find that the half-life of real exchange rates is less than two and a half years, that PPP convergence is...