Are All Shocks Alike? Evidence From the Effects of Oil Shocks on Military Expenditure in Nigeria

Abstract

This study investigated the asymmetric effects of oil shocks–oil price, oil demand and oil supply shocks–on military expenditure in Nigeria. Our study confirmed the presence of short-run and long-run asymmetries in all the three models used. Generally, positive oil price and demand shocks positively influence military expenditure and vice versa for negative shocks. However, a positive oil supply shock is detrimental to military expenditure.