The Military Expenditures and Economic Growth Nexus: Panel Bootstrap Granger Causality Evidence from NATO Countries

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Topal M. H., Unver M., TÜREDİ S.

PANOECONOMICUS, vol.69, no.4, pp.555-578, 2022 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 69 Issue: 4
  • Publication Date: 2022
  • Doi Number: 10.2298/pan170914002t
  • Journal Name: PANOECONOMICUS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, ABI/INFORM, Central & Eastern European Academic Source (CEEAS), EconLit, PAIS International, Directory of Open Access Journals
  • Page Numbers: pp.555-578
  • Keywords: Defense economics, Military expenditures, Economic growth, Asymmetric bootstrap Granger causality, MIDDLE-EASTERN COUNTRIES, DEFENSE EXPENDITURES, AMERICAN COUNTRIES, TURKEY, GREECE, CHINA, LATIN, MODEL
  • Recep Tayyip Erdoğan University Affiliated: Yes


The purpose of this study is to examine the causal linkage between military expenditures and economic growth in 27 North Atlantic Treaty Organization (NATO) member countries. Different periods are studied due to the unavailability of data for the common period for all countries. Both the symmetric and the asymmetric causality between military expenditures and economic growth are investigated under cross-sectional dependence and panel heterogeneity by using the bootstrap panel Granger causality testing approach. The results indicate that there is both symmetric and asymmetric Granger-causality between military expenditures and economic growth, which vary from one country to another. The robust empirical findings support the military expenditures and economic growth nexus in 12 of the 27 NATO member countries. Moreover, the findings show that more empirical evidence between military expenditures and economic growth can be obtained when the asymmetric causality is considered, in addition to the symmetric causality.