Military spending and economic growth: the case of Iran

MPRA Paper from University Library of Munich, Germany

Abstract: Iranian government budget on military over the last decade has been higher than the average of the world. The current increasing international sanctions aim to reduce the military capabilities and capacities of the Iranian government. In this study, we analyze the response of the Iranian economy to shocks in its military budget from 1959-2007, using Impulse Response Functions (IRF) and Variance Decomposition Analysis (VDA) techniques. The Granger causality results show that there is unidirectional causality from military spending to the economic growth. The response of income growth to increasing shocks in the military budget is positive and statistically significant.

Keywords: Military spending; Economic growth; VAR model; Impulse Response; Sanctions; Iran (search for similar items in EconPapers)
JEL-codes: C22 H50 H56 (search for similar items in EconPapers)
Date: 2011-12-20
New Economics Papers: this item is included in nep-ara and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Military Spending and Economic Growth: The Case of Iran (2014)
Working Paper: Military Spending and Economic Growth: The Case of Iran (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:35498

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