Military spending as another cause of the failure of the PPP
In a recent article, with a strong theoretical argument but poor empirical support, military spending was identified to be a determinant of real exchange rate or a factor causing the PPP to deviate from equilibrium exchange rate. The poor empirical results were mostly due to a small number of observations (21 cross-sectional). This article employs pooled data from across 37 developing countries over the 1985-1998 period and provides very strong empirical support for the notion that indeed increased military spending could cause the PPP to deviate from equilibrium exchange rate.
Year of publication: |
2005
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Authors: | Bahmani-Oskooee, Mohsen ; Goswami, Gour Gobinda |
Published in: |
Applied Economics Letters. - Taylor & Francis Journals, ISSN 1350-4851. - Vol. 12.2005, 11, p. 663-667
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Publisher: |
Taylor & Francis Journals |
Saved in:
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