Military Spending and Economic Growth: The Case of Iran

Abstract

Iranian government budget on military over the last decade has been higher than the average

Military Spending and Economic Growth in the Middle East Countries: Bootstrap Panel Causality Test

“…In contrast, the opposite unidirectional causality, running from defense spending to economic growth, is supported by Karagol and Palaz (2004) and Sezgin (2001). Bidirectional causality between defense spending and economic growth is supported by the findings of Al-Jarrah (2005), Chang et al (2001), Kollias, Naxakis, and Zarangas (2004), Kollias, Mylonidis, and Paleologou (2007), LaCivita and Frederiksen (1991), Lee and Chen (2007), and Farzanegan (2012) for Iran. The case of no causality in either direction between defense spending and economic growth is supported by Dakurah, Davies, and Sampath (2001) and Gerace (2002).…”

Oil booms and inequality in Iran

“…We observe that income inequality following the expansion of imports increases and this positive response is statistically significant for the second to fifth year after the shock. At the same time, we observe the emergence of new players such as various revolutionary foundations (Bonyads) and military and paramilitary organizations such as Islamic Revolutionary Guards in the post-revolution period (Farzanegan, 2014). After the end of the war with Iraq (post 1988), the latter became major players in the Iranian economy, reducing the central role of the bazaar.…”

“…At the same time, we observe the emergence of new players such as various revolutionary foundations ( Bonyads ) and military and paramilitary organizations such as Islamic Revolutionary Guards in the post‐revolution period (Farzanegan, ). After the end of the war with Iraq (post 1988), the latter became major players in the Iranian economy, reducing the central role of the bazaar.…”

Effect of military expenditure on economic growth: evidences from India Pakistan and China using cointegration and causality analysis

“…To justify the contribution of military expenditure, researchers have been working for under developed, developing, and developed countries. From the beginning, this kind of studies is more precise for the countries that have achieved their sovereignty from the neighbor countries and the countries who have political consent with other countries (Farzanegan 2014). So the aim of this study is to justify the relationship between military expenditure and economic growth for three neighbor countries that have to maintain a great amount of military budget as they are geographically correlated with one another.…”