MILITARY EXPENDITURE AND UNEMPLOYMENT IN SELECTED NATO MEMBER STATES.

The paper is concerned with the relationship between military expenditure and unemployment. The purpose of the paper is to discover the relationship between military expenditure and the unemployment rate using NATO economies as examples and to analyse possible stabilizing effects of military expenditure by means of the ARDL model. The empirical results reveal a negative correlation between military expenditure and the unemployment rate indicating possible important influence of the armed forces as an employer on the labour market in Albania, Bulgaria, Poland and Romania. However, the model results do not confirm that military expenditure could have a stabilizing effect on the state economic policy across NATO member states. [ABSTRACT FROM AUTHOR]