An empirical analysis on the relationship between military expenditure and economic growth in Türkiye

The instinct of individuals to be superior to each other has led to the desire of communities and countries to take a strong position against each other. As a result of these developments, the rulers of countries in every period from the past to the present have spent military expenditure to ensure the safety of citizens living within national borders. While the allocation of more resources to defense may cause some economic problems, there is a possibility that the allocation of fewer resources may put national security at risk. Therefore, it is important to determine the optimal level of military expenditure in order to have a continuous guarantee of internal and external security. The aim of this study is an empirical examination of the causality relationship between military expenditure and economic growth in Türkiye for the period 1960-2022. Four methods are used to analyze the causality relationship between variables. As a result of the empirical analysis, Toda and Yamamoto (1995) and Hatemi-J (2012) asymmetric causality tests showed that there is a bidirectional causality between the two variables and the feedback hypothesis between military expenditures and economic growth in Turkey is valid. However, the existence of unidirectional causality from economic growth to military expenditures was indicated by Hacker and Hatemi-J (2006) symmetric causality tests and Nazlıoğlu et al. (2016) Fourier Toda-Yamamoto causality tests. This result is an indication that the Keynesian hypothesis is not confirmed in Türkiye for the period under study.