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Abstract
Allocating a portion of national income to defense spending can have varying impacts on the economy. This issue has been the subject of extensive academic debate, with numerous studies analyzing the connection between defense expenditure and economic growth through a range of methodological approaches. However, a consensus has yet to be reached among scholars regarding whether such spending promotes or inhibits economic development. This study aims to investigate the potential effects of defense expenditures on economic growth in Türkiye from 1990 to 2021, employing Barro’s (1990) theoretical framework. The analysis utilizes the autoregressive distributed lag (ARDL) approach and the Bayer-Hanck (2013) cointegration method to examine the relationship between the variables. Furthermore, the ARDL and dynamic ordinary least squares (DOLS) models are employed to estimate the long-term coefficients. The empirical findings indicate that defense expenditures exert a negative impact on economic growth. In contrast, population growth, human capital, and gross fixed capital investment demonstrate a positive and statistically significant relationship with economic growth.
