The effect of military expenditures on unemployment: dynamic panel data analyses

In recent years, examining the impact of military expenditures on unemployment has become a current issue in the literature and a focus of attention for researchers. This research aims to analyse the impact of military expenditures on unemployment in 13 MENA (Middle East and North Africa) countries over the period 2011-2022 using dynamic panel data methods. In the study, unemployment is the dependent variable, military expenditures are the main independent variable, and inflation is the control variable. The method used in the study is a method that has not been used before in the military expenditures and unemployment literature. In this context, the effect of military expenditures on unemployment was examined using four different methods such as pooled OLS, fixed effect OLS, difference GMM, and system GMM dynamic panel data methods. As a result of the analyses, the two-stage system GMM results yielded more consistent, robust and reliable results. According to the two-stage system GMM estimation, it is concluded that military expenditures have a negative effect on unemployment by reducing it and the Keynesian approach and conservative view are supported in MENA countries.