Macroeconomic Effects of Defense Expenditures in Turkey

In this study, the effects of defense expenditure on the macroeconomic majorities of Turkey such as economic growth, inflation, current account balance, import and employment have been investigated. The relation in question has been analysed over the period between 1980-2016 by structural breaks unit root test, causality tests of Toda-Yamamoto and Granger. As a result of this study, it has been detected that defense expenditures are effective on inflation, current account balance and import. Unlike previous studies which same tests were applied, causality from current account balance and GDP to defense expenditures was determined in this article. Evidence has shown that, for Turkish economy, defense expenditures are effective on macroeconomics variables