Öcal, Nadir
Yildirim, Juelide
The ongoing Turkish-Greek antagonism has triggered the interest of defense economists to investigate the various aspects of the arms race between Turkey and Greece. However, empirical studies examining the long-run relationship between the military expenditures of the two countries offer little evidence in favor of such an interaction. This paper attributes the poor results of the previous literature to the adherence to linear cointegration techniques and argues that if the adjustment towards long-run equilibrium is asymmetric, nonlinear co-integration models should be employed. Accordingly, this paper considers threshold autoregressive (TAR) and momentum threshold autoregressive (M-TAR) models as alternative adjustment processes for the cointegration relationship, following Enders and Siklos (2001). The results indicate that the relationship between the variables can be characterized by a threshold cointegration specification following an M-TAR type adjustment process.


Foreign money shocks and the welfare performance of alternative monetary policy regimes
Senay, Ozge; Sutherland, Alan (Wiley, 2007-01-01)
The welfare properties of monetary policy regimes for a country subject to foreign money shocks are examined in a two-country sticky-price model. Money targeting is found to be welfare superior to a fixed exchange rate when the expenditure switching effect of exchange rate changes is relatively weak, but a fixed rate is superior when the expenditure switching effect is strong. However, price targeting is superior to both these regimes for all values of the expenditure switching effect. A welfare-maximising ...
Military Expenditures, Income Inequality, Welfare and Political Regimes: A Dynamic Panel Data Analysis
Tongur, Unal; Elveren, Adem Y. (Informa UK Limited; 2015-01-02)
The goal of this paper is to investigate the relationship between type of welfare regimes and military expenditures. There is a sizeable empirical literature on the development of the welfare state and on the typology of the welfare regimes. There appear to be, however, no empirical studies that examine welfare regimes with special attention to military spending. This study aims at providing a comprehensive analysis on the topic by considering several different welfare regime typologies. To do so, we use dy...
Arms race and economic growth: The case of India and Pakistan
Yildirim, J; Ocal, N (Informa UK Limited, 2006-02-01)
The hostility between India and Pakistan is believed to have led to an arms race between the two countries, which might have contributed to their retarded economic growth. This paper investigates this twin problem of arms race and economic growth for the time period 1949 - 2003. The empirical results suggest that there is a mutual causal relationship between the military expenditures of India and Pakistan. Even though military expenditure does not Granger cause economic growth in Pakistan, there is causalit...
The impact of military spending and income inequality on economic growth in Turkey
Tongur, Unal; Elveren, Adem Yavuz (Informa UK Limited, 2016-05-03)
An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings...
Macroeconomics of twin targeting in Turkey analytics of a financial computable general equilibrium model
TELLİ, ÇAĞATAY; Voyvoda, Ebru; YELDAN, ALP ERİNÇ (Informa UK Limited, 2008-03-01)
The paper provides an overview of the post-1998 Turkish economy and constructs a macroeconomic computable general equilibrium (CGE) model to illustrate the real and financial sectoral adjustments of the Turkish economy under the conditionalities of the 'twin targets': on primary surplus to gross national product (GNP) ratio and on the inflation rate. We further utilize the model to study three sets of issues: (i) the critical role of the expanded foreign capital inflows in resolving the macroeconomic impass...
Citation Formats
N. Öcal and J. Yildirim, “ARMS RACE BETWEEN TURKEY AND GREECE: A THRESHOLD COINTEGRATION ANALYSIS,” DEFENCE AND PEACE ECONOMICS, pp. 123–129, 2009, Accessed: 00, 2020. [Online]. Available: