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Military Spending and Economic Growth in Greece and the Arms Race between Greece and Turkey

Journal of Economics Library

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Title Military Spending and Economic Growth in Greece and the Arms Race between Greece and Turkey
 
Creator PAPARAS, Dimitrios; Land, Farm and Agribusiness Management Department, Harper Adams University, U.K.
RICHTER, Christian; Department of Management Technology, German University in Cairo, New Cairo City, Egypt
PAPARAS, Alexandros; Research student
 
Subject —
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Description Abstract. One of the most important reasons that led Greece to the current macroeconomic instability is the high military spending during the last decades. Thus, it is necessary to examine the impact of military spending on economic growth for the case of Greece. Furthermore, it will be very useful to examine the arms race hypothesis between Greece and Turkey in order to identify if there is an interaction between these countries that leads to the high level of military spending. In this paper we empirically test the relationship between military spending and economic growth for Greece and Turkey during 1957-2013, and examine the validity of arms race hypothesis between the two countries. We deployed unit root tests, unit root tests with structural changes, cointegration techniques and finally Granger causality tests. Granger causality tests in the case of Greece and Turkey imply that the causality runs from military spending to economic growth, however we find that there is no evidence of causality between Greek and Turkish military spending, which mean that that these countries act independently.Keywords. National Government Expenditures, National Security and War, Arms race, Greece, Turkey,  Economic Growth,  ADF, VAR.JEL. H5, H56, O40, E62.
 
Publisher Journal of Economics Library
 
Contributor —
 
Date 2016-03-18
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier http://www.kspjournals.org/index.php/JEL/article/view/648
10.1453/jel.v3i1.648
 
Source Journal of Economics Library; Vol 3, No 1 (2016): March; 38-56
2149-2379
 
Language eng
 
Relation http://www.kspjournals.org/index.php/JEL/article/view/648/746
 
Rights Copyright (c) 2016 Journal of Economics Library
http://creativecommons.org/licenses/by-nc/4.0