IDEAS home Printed from https://ideas.repec.org/a/arh/jrujec/v9y2023i2p201-218.html
   My bibliography  Save this article

Geopolitical risk and military expenditures: Evidence from the US economy

Author

Listed:
  • Osama D. Sweidan

    (United Arab Emirates University, Al Ain, United Arab Emirates)

Abstract

Exploring the nexus between geopolitical risk (GPR) and military expenditures (ME) has been limited during the past period. It is justified by the absence of a well-published proxy for GPR. Recently, the work of Caldara and Iacoviello (2022) stimulated scholars to examine the consequences of GPR. Our paper seeks to understand the relationship between GPR and ME in the United States (US). It designs a theoretical framework and computes an econometric model using the Autoregressive Distributed Lag methodology based on annual data (1960–2021). In addition, it uses the pairwise Toda–Yamamoto causality test. The results show that the relationship between GPR and ME is one of unidirectional causality and runs from ME to GPR in the US. Further, this relationship is statistically significant and positive in the short and long run. This finding supports our hypothesis that the US GPR is a consequence of resource allocation, i.e., ME, and can be controlled, directed, and mitigated. Thus, ME is a tool to achieve the US international hegemony's strategic goals. From a policy implication perspective, it has been proved that GPR has broad negative consequences for various economies. Thus, moving toward cooperation and coordination with other nations instead of accumulating ME tends to support the international economy.

Suggested Citation

  • Osama D. Sweidan, 2023. "Geopolitical risk and military expenditures: Evidence from the US economy," Russian Journal of Economics, ARPHA Platform, vol. 9(2), pages 201-218, July.
    • Handle: RePEc:arh:jrujec:v:9:y:2023:i:2:p:201-218
    DOI: 10.32609/j.ruje.9.97733
    as

    Download full text from publisher

    File URL: https://rujec.org/article/97733/
    Download Restriction: no
    File URL: https://libkey.io/10.32609/j.ruje.9.97733?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Osama D. Sweidan, 2023. "Geopolitical Risk and Income Inequality: Evidence from the US Economy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 575-597, September.

    More about this item

    Keywords

    geopolitical risk military expenditures US economy ARDL model.;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arh:jrujec:v:9:y:2023:i:2:p:201-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Teodor Georgiev (email available below). General contact details of provider: https://rujec.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.