The Effect of the Spanish Civil War on City Shares

This paper examines the effect of the Spanish Civil War (1936–1939) shock on city shares of population applying the methodology proposed by Davis, D. R., and D. E. Weinstein. 2002. “Bones, Bombs, and Break Points: The Geography of Economic Activity.” The American Economic Review 92 (5): 1269–89. We make use of an unexploited long-term, historical dataset of populations disaggregated at the city level. Our instruments, a key methodological issue, are based on dead and wounded data collected by historians. We show that the effect of the Spanish Civil War on capital cities was temporary, and argue that the locational fundamentals theory is the principal explanation.

The Relationship Between Economic Structure and Political Violence in Latin America (1990–2019)

This paper provides evidence about the relationship between economic structure and political violence in Latin American countries in the period 1990–2019. The empirical analysis suggests that manufacturing activities are negatively associated with the number of terroristic attacks. On the contrary it exists a positive relationship between mining activities and political violence. A further analysis suggests that the relative size of manufacturing with respect to mining sector is negatively associated to terroristic attacks occurrence. Such relationship becomes stronger when it is associated to high levels of trade openness.

Spillovers Between Russia’s and Turkey’s Geopolitical Risk During the 2000–2021 Putin Administration

This paper sets out to explore the nexus between Russia and Turkey regarding their geopolitical uncertainty measures (GPR) during the Putin Administration era in Russia. The innovative Caldara and Iacoviello indices and the Vector Autoregressive (VAR) methodology are adopted. This study sheds light on the series of geopolitical events that have taken place in Russia and Turkey in recent decades. Empirical outcomes reveal that Turkish geopolitical uncertainty is a weak influencer that increases Russian GPR in the short-term while decreasing it in the medium-term. The reverse effect does not hold. The nexus between geopolitical risk in Turkey and Russia is found to be unstable. Uncertainty in Turkey constitutes both a negative and a positive determinant of geopolitical stability in Russia, depending on the time horizon of the impact. Russia could take advantage of Turkish positive effects in the medium-run. This could be alarming for investors but could also prove beneficial as they should not invest in Russian assets when the country’s geopolitical risk is elevated due to Turkey’s geopolitical instability. Additionally, it is documented that energy financial markets in Russia are not influential on geopolitical uncertainty.

Defence Spending and Sovereign Debt in Greece: A Long-Term Historical Perspective

The paper sets out to examine the military spending-public debt nexus in the case of Greece. Unlike previous studies that exclusively focus their analyses in the post-WWII period, the empirical investigation conducted herein covers almost the entire two hundred years of the modern Greek state. The estimations using an ARDL framework cover the period 1848–2018 as well as sub-periods therein. To the best of our knowledge, this is the first paper to approach this issue in the case of Greece with such a long-term perspective. In broad terms, the findings do not unearth a statistically traceable effect of defence expenditures on public debt accumulation. The results indicate that this was very much driven by debt dynamics and the need to draw funds to service existing loans. This finding is consistent across both the entire period under scrutiny here as well as the various sub-periods.

Trade Sanctions and Customs Union Partners of the Target Country: Evidence from Kazakhstan

This paper analyses the effects of trade sanctions between Russia and Western countries on Kazakhstan. The nature of these sanctions is characterized by unilateral sanctions from Russia and multilateral sanctions against Russia. Although Kazakhstan refused to participate in these sanction wars, this might affect its economy significantly as it is highly integrated into the Russian economy. An empirical analysis is performed on the product level and time series techniques are used to estimate the effects of the sanctions. The paper assesses the overall effectiveness of trade sanctions through aggregating product level results into a sanction index. The derived sanction index shows that multilateral sanctions did not divert the trade flows from Western countries. On the other hand, the index indicates the existence of sanction busting activities against Russian unilateral counter-sanctions, confirming the hypothesis that unilateral sanctions are ineffective and allow for third-country effects.

Defence Spending and Economic Growth in South Africa: Evidence from Cointegration and Co-Feature Analysis

The paper revisits the causality relationship between defence spending and economic growth for South Africa during the period 1960–2018. The results of our estimation show that defence spending and economic growth are cointegrated and that there is bidirectional Granger causality running between defence spending and economic growth in the long run. We then applied a Hodrick-Prescott filter to decompose the trend and the fluctuation components of the defence spending and economic growth series. The findings from the autoregressive distributed lag bounds test estimations show that in the long- and short-run, the trends and cyclicality of defence spending retard economic growth. The estimation results show that there is cointegration between the trends and the cyclical components of the two series, which suggests that the Granger causality possibly relates to the business cycle. This study suggests that investing more and reducing inefficiency spending in the defence sector during fluctuations can further stimulate economic growth in South Africa.

The Effects of Agricultural Income Shocks on Forced Migration: Evidence from Colombia

The forced migration literature has acknowledged violence as the main driver of internal displacement in the context of armed conflicts. Nonetheless, scant attention has been devoted to the role of income, a factor identified by the standard economic literature as the key driver of voluntary migration. This study aims to fill in this gap by investigating the impact of agricultural income shocks on the number of internally displaced persons fleeing from violence, in the context of the Colombian armed conflict. To address the possible endogeneity between forced migration and income, we use the standardized deviation of rainfall from its historic mean as an instrumental variable for municipal agricultural income. Our main results suggest that the elasticity of forced migration with respect to agricultural income shocks is unitary. This finding highlights the fact that forced migration is the result of a complex decision-making process where violence interacts with individual characteristics and environmental factors. Therefore, public policies aimed at reducing forced migration from rural to urban areas should develop comprehensive strategies that not only improve security conditions at the place of origin but also enhance agricultural productivity and provide access to risk-coping mechanisms for farmers.

The Effects of Military Expenditures on Economic Growth and Inflation: Evidence from Turkey

The hypothesis that military spending affects economic growth and other aspects of the economy has been under scrutiny over the last decades. However, the macroeconomic impact of defense outlays is still an open question for researchers and policymakers. Aiming to contribute to the existing debate, this paper combines Keynesian with monetary theory and develops a discrete-time model that allows for potential fiscal-monetary coordination for financing the military sector in order to examine the effects of defense outlays on income and inflation. Τhe theoretical analysis suggests that military budget expansions can only have temporary effects on income, as in the long run, their impact on the economy is solely inflationary. However, the empirical findings associated with the economy of Turkey are not fully consistent with the theoretical conclusions of the specified model.