The military expenditures and economic growth nexus: Panel bootstrap granger causality evidence from NATO countries

Topal, Mehmet Hanefi; Ünver, Mustafa; Türedi, Salih

doi:10.2298/pan170914002t

Cited by 9 publications

(2 citation statements)

References 52 publications

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“…This method boasts numerous benefits. Foremost among these is that the Kónya causality test does not necessitate the unit root and cointegration tests of variables [49,50], which means variables can be incorporated in estimation equations in their raw form. As the Kónya causality test considers the cross-sectional dependence and heterogeneity of slope coefficients, our primary analysis section was devised in three stages.…”

Section: Methodsmentioning

confidence: 99%

Trade Openness and Sustainable Government Size: Evidence from Central and Eastern European Countries

Tekin,

Çınar,

Sağdıç

et al. 2023

Sustainability

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The ongoing discussion regarding the role of the free market economy and the extent of state intervention is a critical subject in economics. This matter holds special significance for transition economies, as it presents both challenges and opportunities in such contexts. One may perceive the degree of trade openness as a path toward welfare societies. However, the dual impacts of trade openness on an economy, namely, the compensation and efficiency hypotheses, must be considered. The compensation hypothesis proposes that global trade can enhance the economic influence of the state, whereas the efficiency hypothesis advocates for a contraction in the state’s economic undertakings. This study focuses on interpreting this complex scenario, specifically in the context of the European Union’s transition economies. The aim of this research is to uncover how the economic magnitude of a nation influences trade liberalization, and consequently the free market economy, in Central and East European (CCE) countries, using public choice theory as a foundation. The research delves into the causal relationship between trade openness and government size in eleven CCE countries—Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic, and Slovenia. The period covered in this study ranges from 1996 to 2021. The methodological tool utilized for this investigation is the Kónya bootstrap Granger causality test, which accommodates cross-sectional dependence and country-specific variances. The novelty of this study lies in its application of both the compensation and efficiency hypotheses to the context of 11 transition economies in the Central and Eastern European (CCE) region. The results from the Granger causality test demonstrate a unidirectional positive correlation between trade openness and the size of the government for Bulgaria, Croatia, Czechia, and Estonia. On the contrary, Slovenia exhibited a unidirectional negative correlation. These findings confirm the applicability of the compensation hypothesis in Bulgaria, Croatia, Czechia, and Estonia, while supporting the efficiency hypothesis in Slovenia.

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Section: Methodsmentioning

confidence: 99%

Trade Openness and Sustainable Government Size: Evidence from Central and Eastern European Countries

Tekin,

Çınar,

Sağdıç

et al. 2023

Sustainability

View full text Add to dashboard Cite

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“…It increased the risk of arms conflicts, which enforce increased military spending that adversely affects its affluence and natural resource capital [45]. (ii) Emissions-Cleaner Postulate (Treadmill of production view): The supply-side spillovers are associated with the of lowering military expenditures that increase spending on consumer goods to increase the country's aggregate demand [46][47][48]. The emissionscleaner postulate is designed in line with the stated spillovers effect.…”

Section: (I) Emissions-defense Postulate (Treadmill Of Destruction View) (Ii) Emissions-cleaner Postulate (Treadmill Of Production View) mentioning

confidence: 99%

Security Challenges and Air Quality Management in India: Emissions Inventory and Forecasting Estimates

et al. 2021

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The defense and peace literature have focused mainly on the military-growth nexus, with little attention paid to the environmental sustainability agenda, which is impacted by increased global arms transfers. The supply of lead-containing ammunition generates complex gas mixtures (including CO2 emissions) and particulates that harm the healthcare sustainability agenda. Based on the significance of the subject matter, the study uses the Indian economy as a case study, with a significant rate of arms transfers associated with higher carbon emissions. The study analyzed data from more than four decades, from 1975 to 2020. Data on arms imports, military personnel, and military expenditures are used to evaluate the ‘ammunition emissions function’. It corresponds to the three research hypotheses, namely, the ‘emissions-defense burden hypothesis’ (arms transfers increase carbon emissions), the ‘emissions-cleaner hypothesis’ (arms transfers reduce carbon emissions), and the ‘emissions-asymmetric hypothesis’ (positive and negative shocks of arms transfers either support the ‘defense burden hypothesis’ or ‘cleaner hypothesis’). The non-linear autoregressive distributed lag (NARDL) results confirmed the ’emissions-defense burden hypothesis‘ in the long run, as positive and negative shocks from arms imports increase carbon emissions. However, in the short run, positive arms imports increase carbon emissions while negative arms imports decrease carbon emissions. Furthermore, the findings supported the ’emissions-cleaner hypothesis‘ in the relationship between armed forces personnel and carbon emissions. The findings imply that the positive and negative shocks experienced by armed forces personnel reduce carbon emissions in the short and long run. Positive shocks to military spending support the ’emissions-defense burden hypothesis‘ in the short run; however, the results vanished when negative shocks to military spending supported the ’emissions-spillover hypothesis‘ (lowering military spending reduces carbon emissions and increases economic productivity) in the short and long run. The country’s unsustainable economic activities are viewed as a negative factor contributing to long-term carbon emissions increases. The negative shocks of armed forces personnel and positive arms imports would almost certainly have a significant long-term impact on carbon emissions. As a result, the ‘treadmill theory of destruction’ has been confirmed in a country. The study concludes that lead-free ammunition and managing ammunition safety are beneficial to a country’s environmental sustainability agenda.

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Defence spending and real growth in an asymmetric environment: Accessing evidence from a developing economy

Gbadebo,

Bekun,

Akande

et al. 2024

Int. J Fin Econ

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The connection between the defence spending and real growth remains a forefront subject of theoretical and empirical research. Nigeria, like many other developing nations, continues to devote numerous fiscal resources to military spending in ensuring peaceful coexistence and to attain sustainable economic growth after her independence in 1960. Because the interdependence between them has policy implications, this paper studies whether there exists asymmetric causality between them. The dataset, from World Bank database, includes long‐range historical series for military expenditure/GDP ratio and growth rate of GDP, covering 1960–2021. In exploring the empirical relations, the paper shows evidence for the symmetric Granger causality, from Toda–Yamamoto (1995) and asymmetric causality, from Hatemi‐J (2012). The standard (symmetric) identifies unidirectional causality evidence, from defence spending to the GDP per capital growth, with no retained potential feedback from real growth to defence spending. The Hatemi‐J (asymmetric) causality maintains evidence that positive shocks in the defence spending may cause a positive shock in the GDP per capital, supposing that increase perturbations to defence spending would be productive and growth‐enhancing. This causal impact is not evident for positive growth shocks. The findings support the need for policymakers to consider sustained growth targets when redesigning the military budget.

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The military expenditures and economic growth nexus: Panel bootstrap granger causality evidence from NATO countries

Cited by 9 publications

References 52 publications

Trade Openness and Sustainable Government Size: Evidence from Central and Eastern European Countries

Trade Openness and Sustainable Government Size: Evidence from Central and Eastern European Countries

Security Challenges and Air Quality Management in India: Emissions Inventory and Forecasting Estimates

Defence spending and real growth in an asymmetric environment: Accessing evidence from a developing economy

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