Military spending and budget deficits: the impact of US military spending on public debt in Europe (1988–2013)

Raul Caruso, Marco Di Domizio

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

11 Citazioni (Scopus)

Abstract

The aim of this paper is to study the relationship between military spending and sovereign debt in a panel of 13 European countries. In particular, under the assumption of the interdependence of military spending between US and European countries, we analyse whether US military spending affected European sovereign debt in the period 1988–2013. The empirical estimation is based on different steps: (i) a unit root test; (ii) an Arellano–Bond panel estimation and a linear fixed effect model; and (iii) a FMOLS estimation to highlight the long run relationship between debt and relevant variables. General results highlight that debt burden of European countries is: (1) positively associated with US military burden and (2) negatively associated with average military burden of other European countries.
Lingua originaleEnglish
pagine (da-a)534-549
Numero di pagine16
RivistaDefence and Peace Economics
Volume28
DOI
Stato di pubblicazionePubblicato - 2017

Keywords

  • Arellano Bond
  • Economics and Econometrics
  • Fixed effect
  • Fully modified OLS
  • Interdependence
  • Military spending
  • Panel cointegration
  • Public debt
  • Social Sciences (miscellaneous)

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