Economic analysis of defence expenditures during the period after 2000 in Turkey

The amount of resources allocated for defense expenditures has been increasing each year around the world. Defense expenditures, which are such important for countries, have always been wondered and researched by economists. There are a number of studies in which the defense expenditures in Turkey are economicly analyzed from various views. In this study, the relationship between defense expenditures and economic growth, educational and health expenditures is analyzed by doing an econometric analysis. Within this framework, in the first chapter of the study, it is dwelled on the definition, classification and inspection of defense expenditures. In the second chapter, defense expenditures done in the world and in Turkey and world weapon economy are mentioned. Also the development in Turkish defense industry and its effect on the economy are dealt with. In the third and the last chapter, effect of defense expenditures on economic growth, theoretical approaches are examined, a literature review on the subject is done, the effect of defense expenditures on economic growth and educational and health expenditures is analyzed by conducting Unit Root Test, Johansen Co-Integration Test and Granger Causality Test. At the end of the study, a one direction positive causality from gross domestic product towards defense expenditures has been obtained. It has been concluded that the increase in gross domestic product leads to an increase in defense expenditures. While a negative relation is observed between defense and educational expenditures, a positive relation is seen between defense and health expenditures. In addition, as a result of the causality test, no causality relation is found from defense expenditures towards education and health expenditures. Keywords: Defense Expenditures, Defense Industry, Economic Growth, Economic Analysis, Defence, Educational and Health Expenditures