Re-examination of the Convergence in Military Expenditures across NATO Countries: Do Different Approximations in Modelling Structural Breaks Matter?

  • Gulbahar Ucler Department of Economics, Kirsehir Ahi Evran University, Turkey
  • Umit Bulut Department of Economics, Kirsehir Ahi Evran University, Turkey
Keywords: military expenditures, NATO countries, burden-sharing, convergence, unit root tests

Abstract

The goal of this paper is to examine whether the ratio of military expenditures to GDP converges across 27 NATO countries for the period 1993-2018 within the scope of the stochastic convergence analysis. For this purpose, by paying regard to modelling structural breaks, the paper employs unit root tests with and without sharp breaks and also a unit root test with gradual breaks. The empirical findings imply that using different approximations in modelling structural breaks result in different output. The findings indicate weak evidence for the presence of the convergence as well. Theoretical and practical implications of these findings are discussed.

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Published
2020-12-15
How to Cite
Ucler, G., & Bulut, U. (2020). Re-examination of the Convergence in Military Expenditures across NATO Countries: Do Different Approximations in Modelling Structural Breaks Matter?. Applied Economics Journal, 28(1), 43-62. Retrieved from https://so01.tci-thaijo.org/index.php/AEJ/article/view/240922
Section
Research Articles