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THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES

Year 2010, Volume: 2 Issue: 1, 103 - 111, 01.06.2010

Onur Ozsoy Egemen Ipek

Abstract

In this study, the rate of Defense Spendings in the GDP, and the growth rate of GDP, and the
portion of current accounts in GDP and Annual Inflation Rate are examined with getting the
annual data between the 1980-2006 years, and using VAR model for Egypt, Israel, Jordan, and
Turkey. In course of this examination, the results of Granger Casuality and Impulse-Response
Functions and Variance Decomposition were used.
The focus point of our study is for the reason of defense spendings are effective on macroeconomic
variables that while Egypt and Israel has uni-directional Granger causality from the defense
spendings to inflation, for other countries there couldn`t be found any Granger causality. On the
other hand when we look at the impulse response functions, in case of a shock of defense spending
as a percentage of GNP, while the rate of Israel`s inflation and Current account as a percentage
of GNP are affected by the pozitive direction , Turkey`s growth rate is affected negatively. For
Egypt and Jordan, the significiant effects on defense spendings according to macroeconomic
variables couldn`t be found any significiant effects.

Keywords

Defense Expenditure Macroeconomics VAR

References

  • Ateşoğlu, H. S. ve Michael J. Mueller (1990) "Defence Spending and Economic Growth." Defence Economics 2, pg.19-27.
  • Baek, E.G. (1991) "Defense spending and economic performance in the United States." Defence and Peace Economic 2, pg.251-264.
  • Benoit, E. (1978) "Growth and defense in developing countries." Economic Development and Cultural Change 26 (January) , pg. 271-280.
  • Biswas, B. ve R. RAM (1986) "Military expenditures and economic growth in less developed countries: an augmented model and further evidence." Economic Development and Cultural
  • Change 34 (January) , pg. 361-372. Brooks, C. (2008) “Introductory Econometrics for Finance” 2. Edition, Cambridge., pg. 300-301.
  • Chowdhury A. R. (1991) "A Causal Analysis of Defense Spending and Economic Growth" The Journal of Conflict Resolution, Vol. 35, No. 1, pg. 80-97
  • Dakurah, H., Davies, S. ve Sampath, R. (2001) "Defense spending and economic growth in developing countries. A causality analysis." Journal of Policy Modeling 23, pg. 651–658.
  • Davidson, R. ve MacKinnon, J. (1993) "Estimation and Inference in Econometrics." London:
  • Oxford University Press, pg. 708, Table 20.1. Değer, S. Ve Ron, Smith (1983) "Military Expenditure and Growth in Less Developed Countries."
  • The Journal of Conflict Resolution, Vol. 27, No. 2, (Jun., 1983), pg. 335-353
  • Değer, S. (1986) "Economic Development and Defense Expenditure" Economic Development and Cultural Change, Vol. 35, No. 1 (Oct., 1986), pg. 179-196
  • Dickey, D.A. ve Fuller, W.A. (1979) "Distribution of the estimators for autoregressive time series with a unit root." Journal of the American Statistical Association 74, pg. 427–431.
  • Dritsakis, N. (2004) "Defense spending and economic growth: an empirical investigation for
  • Greece and Turkey." Journal of Policy Modeling , pg. 249–264. Gonzalo, J. (1994) "Five alternative methods of estimating long-run equilibrium relationships."
  • Journal of Econometrics60(1–2) , pg. 203–233. Gujarati, N. D. (1999) Basic Econometrics, Mc Graw-Hill, İstanbul: Literatür Yayıncılık.,pg 713
  • Halıcıoğlu, F. (2004) "Defense spending and economic growth in Turkey: an empirical application of new macroeconomic theory." Review of Middle East Economics and Finance 2(3) , pg. 193–
  • IMF (International Monetary Found) Yearbook of International Financial Statistics, various years Kinsella, D. (1990) "Defense spending and economic performance in the United States: a causal analysis." Defence Economics 1(4) , pg. 295–309.
  • Kollias, C., George M. ve Suzanna-Maria, P. (2004) "Defence expenditure and economic growth in the European Union a causality analysis." Journal of Policy Modeling 26, pg. 553–569.
  • Lim, D. (1983) "Another Look at Growth and Defense in Less Developed Countries." Economic
  • Development and Cultural Change, Vol. 31, No. 2 , pg. 377-384
  • Özsoy, O. (2008) "Defence Spending and The Macroeconomy: The Case of Turkey", Defence and Peace Economics, 19:3, pg. 195 – 208
  • Payne, J.E. ve Ross, K.L. (1992) "Defense spending and the macroeconomy." Defense Economics , pg. 161–168.
  • SIPRI (Stockholm International Peace Research Institute), Yearbook (various years ), Taylor & Francis, London.

Year 2010, Volume: 2 Issue: 1, 103 - 111, 01.06.2010

Onur Ozsoy Egemen Ipek

Abstract

References

  • Ateşoğlu, H. S. ve Michael J. Mueller (1990) "Defence Spending and Economic Growth." Defence Economics 2, pg.19-27.
  • Baek, E.G. (1991) "Defense spending and economic performance in the United States." Defence and Peace Economic 2, pg.251-264.
  • Benoit, E. (1978) "Growth and defense in developing countries." Economic Development and Cultural Change 26 (January) , pg. 271-280.
  • Biswas, B. ve R. RAM (1986) "Military expenditures and economic growth in less developed countries: an augmented model and further evidence." Economic Development and Cultural
  • Change 34 (January) , pg. 361-372. Brooks, C. (2008) “Introductory Econometrics for Finance” 2. Edition, Cambridge., pg. 300-301.
  • Chowdhury A. R. (1991) "A Causal Analysis of Defense Spending and Economic Growth" The Journal of Conflict Resolution, Vol. 35, No. 1, pg. 80-97
  • Dakurah, H., Davies, S. ve Sampath, R. (2001) "Defense spending and economic growth in developing countries. A causality analysis." Journal of Policy Modeling 23, pg. 651–658.
  • Davidson, R. ve MacKinnon, J. (1993) "Estimation and Inference in Econometrics." London:
  • Oxford University Press, pg. 708, Table 20.1. Değer, S. Ve Ron, Smith (1983) "Military Expenditure and Growth in Less Developed Countries."
  • The Journal of Conflict Resolution, Vol. 27, No. 2, (Jun., 1983), pg. 335-353
  • Değer, S. (1986) "Economic Development and Defense Expenditure" Economic Development and Cultural Change, Vol. 35, No. 1 (Oct., 1986), pg. 179-196
  • Dickey, D.A. ve Fuller, W.A. (1979) "Distribution of the estimators for autoregressive time series with a unit root." Journal of the American Statistical Association 74, pg. 427–431.
  • Dritsakis, N. (2004) "Defense spending and economic growth: an empirical investigation for
  • Greece and Turkey." Journal of Policy Modeling , pg. 249–264. Gonzalo, J. (1994) "Five alternative methods of estimating long-run equilibrium relationships."
  • Journal of Econometrics60(1–2) , pg. 203–233. Gujarati, N. D. (1999) Basic Econometrics, Mc Graw-Hill, İstanbul: Literatür Yayıncılık.,pg 713
  • Halıcıoğlu, F. (2004) "Defense spending and economic growth in Turkey: an empirical application of new macroeconomic theory." Review of Middle East Economics and Finance 2(3) , pg. 193–
  • IMF (International Monetary Found) Yearbook of International Financial Statistics, various years Kinsella, D. (1990) "Defense spending and economic performance in the United States: a causal analysis." Defence Economics 1(4) , pg. 295–309.
  • Kollias, C., George M. ve Suzanna-Maria, P. (2004) "Defence expenditure and economic growth in the European Union a causality analysis." Journal of Policy Modeling 26, pg. 553–569.
  • Lim, D. (1983) "Another Look at Growth and Defense in Less Developed Countries." Economic
  • Development and Cultural Change, Vol. 31, No. 2 , pg. 377-384
  • Özsoy, O. (2008) "Defence Spending and The Macroeconomy: The Case of Turkey", Defence and Peace Economics, 19:3, pg. 195 – 208
  • Payne, J.E. ve Ross, K.L. (1992) "Defense spending and the macroeconomy." Defense Economics , pg. 161–168.
  • SIPRI (Stockholm International Peace Research Institute), Yearbook (various years ), Taylor & Francis, London.
There are 23 citations in total.

Details

Other ID JA82RY76ES
Journal Section Articles
Authors

Onur Ozsoy

Egemen Ipek

Publication Date June 1, 2010
Published in Issue Year 2010 Volume: 2 Issue: 1

Cite

APA Ozsoy, O., & Ipek, E. (2010). THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES. International Journal of Economics and Finance Studies, 2(1), 103-111.
AMA Ozsoy O, Ipek E. THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES. IJEFS. June 2010;2(1):103-111.
Chicago Ozsoy, Onur, and Egemen Ipek. “THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES”. International Journal of Economics and Finance Studies 2, no. 1 (June 2010): 103-11.
EndNote Ozsoy O, Ipek E (June 1, 2010) THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES. International Journal of Economics and Finance Studies 2 1 103–111.
IEEE O. Ozsoy and E. Ipek, “THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES”, IJEFS, vol. 2, no. 1, pp. 103–111, 2010.
ISNAD Ozsoy, Onur - Ipek, Egemen. “THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES”. International Journal of Economics and Finance Studies 2/1 (June 2010), 103-111.
JAMA Ozsoy O, Ipek E. THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES. IJEFS. 2010;2:103–111.
MLA Ozsoy, Onur and Egemen Ipek. “THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES”. International Journal of Economics and Finance Studies, vol. 2, no. 1, 2010, pp. 103-11.
Vancouver Ozsoy O, Ipek E. THE RELATIONSHIP BETWEEN DEFENSE SPENDING AND MACROECONOMIC VARIABLES. IJEFS. 2010;2(1):103-11.