Prior scholarly analysis of Israeli military spending has focused on national security questions. We present a mathematical model incorporating security threats as well as electoral cycles and corporate profits. The parameters are estimated empirically. The results support the idea that in...

Evidence from Israel suggests that economic growth may benefit from increased investment rates and cuts in defense spending - in other words, an economic `peace dividend'. Recent scholarly work, however, focusing on short-term, direct impacts, has provided little evidence for the existence of...