Defending the nation, securing the economy

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dc.contributor.authorIuga, Iulia-Cristina
dc.contributor.authorSocol, Adela
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2023-12-04T11:47:24Z
dc.date.available2023-12-04T11:47:24Z
dc.description.abstractLiterature on the effects of military expenses and GDP is mixed, although a significant body of research supports the hypothesis that military expenses positively impact GDP. To contribute to the literature, this article analyses whether military expenditures influenced GDP in 27 European Union member countries from 1998 to 2021 by studying two clusters specific to the analysed countries: NATO and non-NATO countries. The way in which military expenditures affect GDP has been analysed using both the classic static models for panel data (pooled OLS, fixed effects, random effects, feasible generalized least squares, panel corrected standard errors, Poisson pseudomaximum likelihood regression) as well as by applying dynamic panel model system GMM, reverse causality, and half-panel jackknife regression models, with unemployment and inflation selected as control variables. The findings indicate that the current values of military expenditures positively influence GDP in both clusters, while past values of military expenditures positively influence GDP in the NATO EU countries and negatively affect GDP in the non-NATO EU countries. There are several key differences between NATO EU members and non-NATO EU members, particularly in regard to their security commitments and defence spending. NATO members are part of a mutual defence pact, agreeing to the principle of collective defence, which also impacts public defence policies and public budgets. This paper offers practical value to policymakers, stakeholders, and academicians. In addition, it has two significant political implications. First, it highlights the role of military expenditures as a catalyst for economic growth but does not underestimate the dangers of using military spending as a pretext to stimulate employment. Second, it establishes the optimal proportion of military expenditures required to fulfil two essential targets of national and European policies – security and welfare.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2023-4-002
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.urihttps://dspace.tul.cz/handle/15240/174244
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectGDPen
dc.subjectmilitary spendingen
dc.subjectunemploymenten
dc.subjectinflationen
dc.subjectGMMen
dc.subject.classificationE24
dc.subject.classificationP24
dc.subject.classificationP44
dc.subject.classificationC23
dc.subject.classificationH61
dc.subject.classificationH50
dc.titleDefending the nation, securing the economyen
dc.typeArticleen
local.accessopen
local.citation.epage37
local.citation.spage17
local.facultyFaculty of Economics
local.filenameEM_4_2023_2
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue4
local.relation.volume26
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