A System Estimation of the Defense-Growth Relation in Turkey

Jülide Yildirim and Selami Sezgin

Chapter 14 in Arming the South, 2002, pp 319-335 from Palgrave Macmillan

Abstract: Abstract The effects of military expenditure on economic growth have been examined extensively in recent years. However there is no agreement regarding the question of how and in what respects military spending affects economic growth. Feder-Ram or Deger-type multi-equation models have been estimated for a number of country studies and/or groups of countries, using both time-series and cross-sectional data (for extensive literature reviews, see e.g., Dunne, 1996; Ram, 1995; Deger and Sen, 1995; and Sandler and Hartley, 1995). Empirical studies that employ multi-equation models are comprised of three to four equations such as for growth, the savings or investment ratio, the trade balance ratio, and the defense burden. These models are estimated using twostage least squares or three-stage least squares. Even though there are a variety of studies, the results concerning the military expenditureeconomic growth relationship are mixed. Among other things, the evident inconsistency of results may be due to the varying sample periods of the studies, the underlying economic models, and the econometric techniques employed.

Keywords: Percent Level; System Estimation; Adjustment Coefficient; Military Expenditure; Cointegration Analysis (search for similar items in EconPapers)
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50125-6_15

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DOI: 10.1057/9780230501256_15

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