Earning a Peace Dividend in a Crisis Environment: The Greek Case

Peace Economics, Peace Science and Public Policy, 2017

Posted: 15 Mar 2018

See all articles by Zacharias Bragoudakis

Zacharias Bragoudakis

Bank of Greece; National and Kapodistrian University of Athens, Department of Economics

George Zombanakis

Independent

Date Written: May 15, 2015

Abstract

In this paper we attempt to assess the extent to which conversion policies involving the shift of resources from the defence to the non-defence sector may entail some form of peace dividend for the economy of Greece. The issue has become one of increasing importance during the past few years during which the demand for growth-supporting policies has been a top priority requirement as an antidote to the recession. The paper employs a VAR model in order to investigate the interactions among the growth rate of gross domestic product and alternative measures of defence expenditure. We find that defence spending and more so, expenditure on defence equipment, under the present circumstances in which the bulk of the procurement represents import payments is not related in any form of Granger-causal relationship with the economic growth of Greece. Our results point to the fact that there can be no possibility of a peace dividend under the circumstances prevailing, unless defence procurement policies shift to an import – substitution strategy.

Keywords: Growth, IRF’s variance decomposition, military expenditure, peace dividend, VAR

JEL Classification: F45, H56, H60

Suggested Citation

Bragoudakis, Zacharias and Zombanakis, George, Earning a Peace Dividend in a Crisis Environment: The Greek Case (May 15, 2015). Peace Economics, Peace Science and Public Policy, 2017, Available at SSRN: https://ssrn.com/abstract=3128214

Zacharias Bragoudakis (Contact Author)

Bank of Greece ( email )

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National and Kapodistrian University of Athens, Department of Economics ( email )

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Greece
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HOME PAGE: http://www.econ.uoa.gr/

George Zombanakis

Independent ( email )

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