Econometric analysis of the relationship between defense expenditures, current balance and weapon import and economic growth

Security has been one of the biggest needs of human beings to survive since their creation. This search and need for security brought with it the obligation of states to defend themselves. World wars, cold war, polarization between countries, power struggles, desire to get rich, understanding of sovereignty, etc. have become affecting the world. It would be a very optimistic approach if we think economic stability could be stable.As long as international relations of interest persist, uncertainty will increase, the complexity that this uncertainty increases will trigger the desire of countries to protect themselves and hold their sovereignty. As long as international relations of interest persist, uncertainty will increase, the complexity that this uncertainty increases will trigger the desire of countries to protect themselves and hold their sovereignty.This complexity will also increase the desire of countries protect their citizens.This desire will become an irresistible demand. These situations naturally reflected on economic units, because it is possible to consider defense expenditures as the price of sovereignty. As the chaos in the country increases, the need for defense naturally increases, and this necessity necessitates the transfer of more resources to the defense field because defense expenditures are the part allocated from public expenditures for defense services. However, the share allocated to defense increases as the threat to the country increases. Since Benoit, studies have been carried out on how the resource allocated to industry affects the economy. One of the reasons for the constant renewal of these studies is that throughout history, states have allocated a share of defense and that no state has given up this share. The important thing is to keep this defense margin at an optimum level, because allocating too much resources to defense expenditures shows that there is no correct defense plan. A correct plan and planning of the required level of defense expenditures will affect the economic growth at the best level. There are multiple factors that affect countries when they make their defense spending. From a general perspective, it is seen that developed countries spend more on defense. This study investigated the effects of military spending, current account balance and arms exports on economic growth in selected countries using Augment Dickey Fuller test, ADF Unit Root test, Johansen Cointegration test, Variance decomposition analysis, Housman test, Panel data analysis. The study primarily examined Turkey's 1965-2015 year. Turkey's economic growth in the long-term factors have been determined. Later, the research was extended by adding some countries such as France, Britain, Germany, Italy, Canada. An empirical research has been conducted across all these countries. The date range to be selected in the research was selected according to the availability of data.