Does defence expenditure deter economic growth in Turkey? A cointegration analysis

Erdal Karagol and Serap Palaz

Defence and Peace Economics, 2004, vol. 15, issue 3, 289-298

Abstract: This paper investigates a series of unit root, cointegration and causality tests to ascertain the direction of causality between the growth of GNP and defence expenditure in Turkey for the years 1955-2000. The main conclusion is that there is a long-run equilibrium relationship between GNP and defence expenditures. Furthermore, the short run causality test indicates that there is a unidirectional causality between variables, from defence expenditure to economic growth. In order to see the effect of a shock, we employed impulse response analyses. The results show that GNP decreased during the period then output finally recovered from the initial shock to defence expenditures.

Keywords: Defence, Cointegration, Turkey, JEL codes: C22; C32, H56, (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (46)

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DOI: 10.1080/10242690320001608908

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