Impacts of Military Expenses on the Economic Development of Iran: Given the Impacts of the imposed Iran-Iraq War and September 11 Event

This article investigates the impacts of the military expenses on the economic development and growth of the I.R. of Iran during the period of 1974-2005 along with the respective impacts of the Iran- Iraq 8-year Imposed War and the September 11, 2001. To this end, Traditional Production Model was employed based on which the effects of the military section, balance of payments, savings, task force, the War and the September 11 event on the economic growth are addressed. The analysis made based on the Model shows that the military expenses and trade balance have had significant impacts on the economic development of Iran. In other words, increased share of the military expenses in Gross National Product (GNP) has entailed the improvement of trade balance which is believed to be a positive impact on the economic development. Variables of task force and per capita GNP indicate positive effects in this respect. On the contrary, the findings show negative impacts resulting from the variables of the War and the September 11 event on the economic development of Iran.