Dynamic panel data analysis: The relationship between spendings on national defence and economic growth

Abstract

Ensuring national security and defense expenditures made for this purpose are also of great importance for the country's economy. Because providing a safe environment is an important phenomenon in the realization of economic growth. On the other hand, defense expenditures have a serious impact on economic growth, as it has a high share in the budget and is an important component of GDP. In this thesis, the effect of inflation, external debt stock and defense expenditures on economic growth is investigated in a dynamic panel data model for at least 15-20 NATO member countries. Data is taken from the World Bank and OECD. For the selected country group in the study, dynamic panel data analysis is carried out using the data between 2010-2019. Tests are conducted using Stata statistical software.