Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108565
Authors: 
Ozun, Alper
Erbaykal, Erman
Year of Publication: 
2011
Series/Report no.: 
Koç University-TÜSİAD Economic Research Forum Working Paper Series 1119
Abstract: 
The main purpose of this paper is to analyze the causal relationships between defence spending and economic growth using the Toda-Yamamoto approach to Granger causality test in the case of selected NATO countries for the period of 1949-2006. NATO countries spend biggest proportion of defence spending in the world. Granger causality test on defence-growth issue employed by number of scholars but this paper is firstly used Toda-Yamamoto approach to granger causality to analyze relationship between defence spending and growth. The results show that unidirectional causality exists in seven NATO countries while for five countries no causal relationships were found. On the other hand, Turkey differs from other countries in that the relationship is bilateral.
Subjects: 
defence spending
Turkish economy
Granger causality
NATO
economic growth
Toda-Yamamoto approach
JEL: 
H56
C22
Document Type: 
Working Paper

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