A Linear and Non-Linear Causality Analysis between Military Expenditures and External Debt in NATO Member Countries

Stella Karagianni
Additional contact information
Stella Karagianni: Department of Social Administration and Political Science, Democritus University of Thrace, Greece

European Journal of Marketing and Economics Articles, 2024, vol. 7

Abstract: This paper investigates the causal nexus between military expenditure and external debt across NATO countries from 1960 to 2015 using both linear and non-linear Granger causality frameworks. Its primary innovation lies in the empirical application of the Francis et al. (2010) non-linear test, marking the first known study to utilize this methodology for exploring complex, non-linear dependencies between defense spending and national debt. The empirical results reveal distinct patterns: linear causal relationships are evident in Greece, Italy, the UK, and the USA, while significant non-linearities characterize the dynamics in Turkey and the USA. By identifying these diverse causal directions, the study offers a more sophisticated understanding of how defense budgets impact fiscal stability. Ultimately, these findings provide essential guidance for regulators and decision-makers, equipping them with the evidence needed to balance national security requirements with sustainable debt management strategies within the NATO alliance.

Keywords: military expenditures; external debt; NATO countries (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://revistia.com/index.php/ejme/article/view/3518 (text/html)
https://revistia.com/files/articles/ejme_v7_i4_24/Karagianni.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eur:ejmejr:188

Access Statistics for this article

More articles in European Journal of Marketing and Economics Articles from Revistia Research and Publishing
Bibliographic data for series maintained by Revistia Research and Publishing ().