Analysis of the relationship between defense expenditures and selected economic and social variables for the Turkish economy

One of the most important facts in today's world is the concept of defense. It is very important for Turkey, especially with the influence of existing geographical conditions, to determine and analyze the determinants of defense well. Apart from the areas related to the technological dimension of defense, one of the most important points for countries is economic and social determinants. When it comes to the economic field, the first basic indicator that comes to mind is economic growth. Accurate analysis of the relationship between defense expenditures and economic growth is important to guide appropriate policies. In addition, it is important to examine and analyze the employment phenomenon at the same level, to determine the new expenditure items and to see the final contribution of existing ones. Finally, it is necessary to determine the direction of energy consumption, which is one of the biggest problems of recent years, as a result of defense expenditures, and to direct the results to create correct energy policies. The importance of creating a basis for shifting energy resources to renewable resources should be tested, especially by examining the effectiveness of foreign dependency in fossil energy. In this context, the study will empirically analyze the relationship between defense expenditures, real gross domestic product per capita, employment rate and energy consumption per capita in the period 1990-2021. First, the stationarity level of the variables will be tested using Extended Dickey-Fuller (1981) and Phillips-Perron (1988), which are unit root tests that do not include traditional structural breaks. The existence of a long-term relationship will be analyzed with Johansen (1988) cointegration test. Under the presence of cointegration, coefficient estimates of the variables will be tested through the estimators of Phillips and Hansen (FMOLS, 1990), Stock and Watson (DOLS, 1993) and Park (CCR, 1992). Finally, short, medium and long-term causality relationships were presented through Breitung and Candelon (2006) frequency distribution causality test of the relationship between these variables. The results obtained showed that while there was no causality relationship between defense expenditures and growth in the relevant period, there was a causality relationship between defense expenditures and employment in the short, medium and long term. When its relationship with energy consumption was examined, it was concluded that there was a causality from defense expenditures to energy consumption.