An analytical approach on defense expenditure and economic growth: the case of Turkey and Greece

The objective of this study is to examine the relationship between defense expenditure and economic growth for Turkey and Greece in the period of 1956-2003 using yearly data. Therefore we use Engle-Granger cointegration methodology and Granger causality test. It is found that these two variables are cointegrated for both countries studied. We found unidirectional causality running from economic growth to defense expenditure only for Turkey