Military Expenditure and Economic Growth: The Case of Turkey

This study applies Johansen co-integration and Granger causality tests to examine the long-run equilibrium relationship and the causality between military expenditure (ME) and economic growth (GDP) for the case of Turkey which has been a rapidly developing economy for the last decade. Annual data covering 1988-2013 periods is used to conduct empirical investigation. The findings of the study indicate that in the long-run, military spending and economic growth are co-integrated. The results of Granger causality test suggests that there is a uni-directional relationship running from economic growth to military spending, however any causality from military spending to economic growth isn’t observed in the present study.