DOI: 10.32609/j.ruje.10.141382

Authors: Oleg V. Buklemishev

Abstract: The article examines historical aspects, general economic logic, and theoretical discussions on the policy of stimulating the economy through increased government appropriations for defense items. It provides a brief overview of empirical studies on economic effects of defense spending in Russia and other countries. The secondary nature and low manageability of economic effects of defense policy are emphasized. The size of the fiscal impulse due to defense items of government expenditure, its positive and negative effects are analyzed in the Russian economy for the period 2022–2024. In addition to the unlikely gains through security and supply channels, the limited availability of free production capacity and labor force are stressed among the factors hindering the positive demand effects of increased defense spending. This gives rise to inflationary consequences, as well as the contradiction between tightening monetary conditions and continuing fiscal stimulation. A conclusion is made about the prevalence and possible aggravation of negative outcomes of sustaining and expanding military outlays.

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DOI: 10.32609/j.ruje.9.97733

Authors: Osama D. Sweidan

Abstract: Exploring the nexus between geopolitical risk (GPR) and military expenditures (ME) has been limited during the past period. It is justified by the absence of a well-published proxy for GPR. Recently, the work of Caldara and Iacoviello (2022) stimulated scholars to examine the consequences of GPR. Our paper seeks to understand the relationship between GPR and ME in the United States (US). It designs a theoretical framework and computes an econometric model using the Autoregressive Distributed Lag methodology based on annual data (1960–2021). In addition, it uses the pairwise Toda–Yamamoto causality test. The results show that the relationship between GPR and ME is one of unidirectional causality and runs from ME to GPR in the US. Further, this relationship is statistically significant and positive in the short and long run. This finding supports our hypothesis that the US GPR is a consequence of resource allocation, i.e., ME, and can be controlled, directed, and mitigated. Thus, ME is a tool to achieve the US international hegemony’s strategic goals. From a policy implication perspective, it has been proved that GPR has broad negative consequences for various economies. Thus, moving toward cooperation and coordination with other nations instead of accumulating ME tends to support the international economy.

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DOI: 10.3897/j.ruje.4.27086

Authors: Christos Kollias, Suzanna-Maria Paleologou, Panayiotis Tzeremes, Nickolaos Tzeremes

Abstract: The allocation of resources to defense and national security is influenced by several factors, both domestic and external. Findings, reported in the relevant empirical literature, suggest that military spending is determined by a cohort of economic, strategic and political factors. This paper estimates a demand function for Russian military expenditure for the period 1992–2015. The results indicate that Russian defense spending is strongly dependent on income from energy exports as well as on the overall performance of the Russian economy. Strategic factors also emerge as significant determinants of such expenditure.

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DOI: 10.1016/j.ruje.2017.09.001

Authors: Alexey Kudrin, Ilya Sokolov

Abstract: The paper discusses fiscal policy parameters through 2024. The suggested way to ensure long-term fiscal stability is stabilizing both the general government revenues and expenditures as percentages of GDP at levels differing by the public debt service payments and then applying a new version of the fiscal rule. The redistribution of fiscal spending from unproductive to productive areas (primarily investment in human and physical capital) is considered to boost economic growth. The possible use of additional spending on education, public health, and transport systems is presented, as is the optimization of expenditures in nonproductive areas.

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DOI: 10.1016/j.ruje.2016.06.002

Authors: Julian Cooper

Abstract: The article analyses the development of the military dimension of Russia's economy over the past decade or more, including the significant growth of military expenditure and its principal driver, spending on the ambitious state armament programme to 2020. For the first time for almost twenty-five years Russia once again possesses capable armed forces. With greater economic and military strength Russia's leadership now feels able to be more assertive, even militant, on the world stage. These developments threaten to be constrained by the poor performance of the economy, facing the government with a policy challenge. However, for Russia and the main Western powers there can be no going back to the status quo ante.

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