Abstract:

While defense expenditures are considered obligatory for national security, they can also affect variables that determine social welfare such as economic growth and employment. In this context, revealing the possible effects of defense expenditures on the said variables is very important in terms of the need in the literature and the welfare of the society. As a matter of fact, the aim of this study is to examine the causality relationship between defense expenditures, economic growth and unemployment with econometric methods for the Turkish economy. In this econometric study, which was conducted using annual data on defense expenditures, unemployment and economic growth variables between the years 1988-2020 in Turkey, the Toda-Yamamoto (1995) Causality Test was applied. As a result of the econometric application, it has been concluded that there is a bilateral cause-effect relationship between defense expenditures and economic growth. In addition, only a one-way causality relationship has been detected, from unemployment to defense expenditures, but not from defense expenditures to unemployment. In the econometric analysis carried out within the scope of the study, the relationship between economic growth and unemployment was also investigated and it was found that there is no causality relationship from economic growth to unemployment and from unemployment to economic growth

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