Citation

Karagol E, Palaz S. Def. Peace Econ. 2004; 15(3): 289-298.

Copyright

(Copyright © 2004, Informa - Taylor and Francis Group)

DOI

10.1080/10242690320001608908

PMID

unavailable

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.