The impact of military spending and income inequality on economic growth in Turkey

Tongur U., Elveren A. Y.

DEFENCE AND PEACE ECONOMICS, vol.27, no.3, pp.433-452, 2016 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 27 Issue: 3
  • Publication Date: 2016
  • Doi Number: 10.1080/10242694.2014.925324
  • Journal Name: DEFENCE AND PEACE ECONOMICS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.433-452
  • Keywords: Growth, Military expenditure, Solow growth model, Human capital, Income inequality, C22, O11, H56, DEVELOPING-COUNTRIES, DEFENSE EXPENDITURE, GRANGER CAUSALITY, COINTEGRATION, ACCUMULATION, EDUCATION, POVERTY, GREECE, MODEL
  • Middle East Technical University Affiliated: Yes

Abstract

An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963-2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.