EVALUATING NATO LONG RUN DEFENSE BURDENS USING UNIT ROOT TESTS

Abstract

This study evaluates NATO long run defense burdens by analyzing the time‐series properties of burden measures, namely growth of defense spending, defense share in national output, defense share in government spending, defense spending per capita, and defense share in total NATO spending for the time period 1949–2002. The study also compares the effect of using government Purchasing Power Parity conversion factors and Market Exchange Rates for defense share in total NATO expenditure conversions and the implications of NATO expansion in light of the defense burden measures of the newer NATO members.