Band 28, Heft 1

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.

Compulsory military service, due to its timing in the lives of men (at a young age, which is the key period for increasing human capital) and its length (in many cases, about a year and a half to two years), implies a significant cost (explicit or implicit) for them. Individual costs incurred as a result of compulsory military service is an important aspect to consider when measuring the economic and social costs of enforcing conscription. Compulsory military service has been a part of Iranian government policy since 1925. Accordingly, an attempt to estimate the cost for men in Iran is the main subject of this paper. We will estimate the willingness of men to pay for exemption from compulsory military service based on the dichotomous choice contingent valuation model (One-and-One-Half Bounded approach). The mean of willingness to pay is estimated at 1.61 billion Rials (38,000 USD) while the median of willingness to pay is 1.64 billion Rials. A calculation of the median of willingness to pay for sub-groups of respondents shows that individuals with an income of more than 70 million Rials (1670 USD) per month have the highest median of willingness to pay, followed by those with a Ph.D. degree, and finally, undergraduates are individuals with the lowest median of willingness to pay.

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.

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.