This paper tests a simple hypothesis: that given the occurrence of war between two countries, the country that is more egalitarian at the moment of military decision is likely to emerge the victor. First, we examine cases where comparative economic inequality can be measured directly, using the...

This paper extends the analysis of the conflict-trade relationship by introducing foreign direct investment (FDI). We present a formal model that shows why FDI can improve international relations. We then proceed to test the model empirically. Our empirical results show that foreign direct...

In a recent paper of this journal (Vol. 18(1), 2007, pp. 75-85)], Kollias, Mylonidis, and Paleologou (henceforth KMP) examined the relationship between the GDP growth rate (denoted as gdp) and military expenditure as a share of GDP (denoted as milex) using panel data from the 15 countries of the...

Classic time-series forecasting models can be divided into exponential smoothing, regression, ARIMA, threshold, and GARCH models. Functional form is investigator-specified, and all methods assume that the data generation process across all segments of the examined time-series is constant. In...

Hatzinikolaou raises a number of issues related mainly to the econometrics of our paper. These issues are categorized according to the three stages of econometric analysis: specification, estimation, and diagnostic checking. We categorize our reply to his comments accordingly.