Military Spending and Economic Stability in BRICS+ and G7 Countries

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Uluslararası Ekonomi ve Yenilik Dergisi
Cilt: 11 Sayı: 2
Military Spending and Economic Stability in BRICS+ and G7 Countries

Military Spending and Economic Stability in BRICS+ and G7 Countries

Pages : 579-604

View : 25 | Download : 45

Publication Date : 2025-10-01

Article Type : Research Paper

Abstract :This paper investigates the economic and geopolitical implications of military spending across two major global blocs: BRICS+ and the G7. While G7 countries exhibit stable, institutionally anchored defense budgets, BRICS+ nations have recently experienced a rapid increase in military expenditures per GDP, driven by economic growth, trade surpluses, and aspirations for greater global influence. Using advanced panel econometric methods, including Two-Stage Least Squares (2SLS), Cross-Sectionally Augmented ARDL (CS-ARDL), and Pooled Mean Group (PMG) estimators, the study analyzes the macroeconomic drivers of military spending, fiscal trade-offs, and strategic consequences in both blocs. Results show that GDP is the dominant and most consistent determinant of defense spending. G7 countries display strong long-run elasticity but low short-run responsiveness, potentially reflecting institutional inertia. In contrast, BRICS+ defense budgets are more responsive to economic and fiscal fluctuations yet show weaker long-run stability. Inflation, fiscal balance, and external accounts exhibit heterogeneous effects. The findings reveal how developmental stages influence the balance between military ambitions and economic priorities.
Keywords : G7, BRICS, askeri harcamalar, panel veri

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