MILITARY EXPENDITURE AND ECONOMIC GROWTH IN MIDDLE EASTERN COUNTRIES AND TURKEY: A NON-LINEAR PANEL DATA APPROACH

Date

2017-01-01

Author

KARADAM, DUYGU YOLCU
YILDIRIM ÖCAL, JÜLİDE
Öcal, Nadir

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The economic growth effects of military expenditure have been the subject of a large literature in defence economics. Theories on the economic impacts of military expenditure greatly differ and include arguments that they either enhance economic growth or crowd out productive investments. Empirical literature on defence expenditure and economic growth nexus generally employs linear specifications to investigate the impact of defence expenditures on economic growth. Although it is now well established that many economic variables may have a non-linear data-generating mechanism, it seems that this reality has long been neglected in empirical work on defence-growth nexus. This paper attempts to fill this gap by employing non-linear panel data models to examine the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time period 1988-2012. Results show that the effect of military expenditure on economic growth is nonlinear such that the state of the economy actually determines the effect of the former on the latter. This is important not only in showing asymmetric relationship between these variables but also in revealing the reasons of mixed results of earlier literature

Subject Keywords

Military expenditure, Economic growth, Non-linear panel data models, Middle Eastern countries, Turkey

URI

https://hdl.handle.net/11511/52299

Journal

DEFENCE AND PEACE ECONOMICS

DOI

https://doi.org/10.1080/10242694.2016.1195573

Collections

Department of Economics, Article

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Citation Formats

D. Y. KARADAM, J. YILDIRIM ÖCAL, and N. Öcal, “MILITARY EXPENDITURE AND ECONOMIC GROWTH IN MIDDLE EASTERN COUNTRIES AND TURKEY: A NON-LINEAR PANEL DATA APPROACH,” DEFENCE AND PEACE ECONOMICS, pp. 719–730, 2017, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/52299.