Defense Spending and Economic Growth in Turkey: An Empirical Application of New Macroeconomic Theory

This study presents new empirical evidence on the relationship between the level of economic growth and defense expenditures in the case of Turkey for the period of 1950-2002. On using new macroeconomic theory and multivariate cointegration procedure, this study demonstrates empirically that there exists a positive long-run relationship between aggregate defense spending and aggregate output in Turkey. In addition, the CUSUM and CUSUMSQ tests confirm the stability of the aggregate output function. The results obtained from this study are, by and large, in line with the previous studies concerning Turkey.