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

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  • Ucler, Gulbahar
  • Bulut, Umit

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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  • Ucler, Gulbahar & Bulut, Umit, 2021. "Re-examination of the Convergence in Military Expenditures across NATO Countries: Do Different Approximations in Modelling Structural Breaks Matter?," Asian Journal of Applied Economics, Kasetsart University, Center for Applied Economics Research, vol. 28(1).
    • Handle: RePEc:ags:thkase:334392
    DOI: 10.22004/ag.econ.334392
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    Cited by:

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    More about this item

    Keywords

    International Development;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative

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