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

Gulbahar Ucler () and Umit Bulut
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Gulbahar Ucler: Department of Economics, Kirsehir Ahi Evran University, Turkey

Asian Journal of Applied Economics/ Applied Economics Journal, 2021, vol. 28, issue 1, 43-62

Abstract: The goal of this paper is to investigate whether the ratio of military expenditures to GDP converged across 27 NATO countries for the period 1993–2018 within the scope of stochastic convergence analysis. For this purpose, paying attention to the modeling of structural breaks, the paper employs unit root tests with and without sharp breaks and a unit root test with gradual breaks. The empirical findings imply that using different approximations in modeling structural breaks results in different outputs. The findings indicate weak evidence for the presence of convergence as well. The theoretical and practical implications of these findings are discussed.

Keywords: military expenditures; NATO countries; burden-sharing; convergence; unit root tests (search for similar items in EconPapers)
JEL-codes: C22 H56 N40 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Asian Journal of Applied Economics/ Applied Economics Journal

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Journal Article: Re-examination of the Convergence in Military Expenditures across NATO Countries: Do Different Approximations in Modelling Structural Breaks Matter? (2021)
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