An empirical analysis of turkey's defence‐growth relationships with a multi‐equation model (1956–1994)*

This study analyses defence‐growth relationships in Turkey for the years 1956 and 1994. After a review of the empirical studies on the defence‐growth relationship, the relationship is investigated with a Deger type demand and supply side model using 2SLS and 3SLS simultaneous equation method. The study concludes that Turkey's economic growth is stimulated by its defence sector while defence spending has no significant effect on savings and the balance of trade. The study also concludes that the major determinants of Turkish defence spending are its income level, the conflict with PKK (Kurdish Worker's Party) and Greece's defence spending.