Tourism development and economic growth: A closer look at panels

This paper uses the panel data of energy consumption and GDP for 82 countries from 1972 to 2002. Based on the income levels defined by the World Bank, the data are divided into four categories: low income group, lower middle income group, upper middle income group, and high income group. We employ the GMM-SYS approach for the estimation of the panel VAR model in each of the four groups. Afterwards, the causal relationship between energy consumption and economic growth is tested and ascertained. We discover: (a) in the low income group, there exists no causal relationship between energy consumption and economic growth; (b) in the middle income groups (lower and upper middle income groups), economic growth leads energy consumption positively; (c) in the high income group countries, economic growth leads energy consumption negatively. After further in-depth analysis of energy related data, the results indicate that, in the high income group, there is a great environmental improvement as a result of more efficient energy use and reduction in the release of CO2. However, in the upper middle income group countries, after the energy crisis, the energy efficiency declines and the release of CO2 rises. Since there is no evidence indicating that energy consumption leads economic growth in any of the four income groups, a stronger energy conservation policy should be pursued in all countries.

Causal Relationship between Energy Consumption and GDP Growth Revisited: A Dynamic Panel Data Approach

Causal relationship between energy consumption and GDP growth revisited: A dynamic panel data approach

This paper reviews some of the theoretical and econometric issues involved in estimating growth models that include military spending. While the mainstream growth literature has not found military expenditure to be a significant determinant of growth, much of the defence economics literature has found significant effects. The paper argues that this is largely the product of the particular specification, the Feder-Ram model, that has been used in the defence economics literature but not in the mainstream literature. The paper critically evaluates this model, detailing its problems and limitations and suggests that it should be avoided. It also critically evaluates two alternative theoretical approaches, the Augmented Solow and the Barro models, suggesting that they provide a more promising avenue for future research. It concludes with some general comments about modelling the links between military expenditure and growth.

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Models of military expenditure and growth: a critical review

Employing second-generation econometric procedures that consider multiple structural breaks in the series, this article examines Turkey as a case study in the investigation of the moderating role of financial development in a conventional environmental Kuznets curve (EKC) The study uses two separate models for this purpose: (1) the main effects model and (2) the interaction effects model The results of this investigation suggest a long-term equilibrium relationship between financial development and the EKC in Turkey, using both model options Financial development has been found to moderate the effect of real output on carbon dioxide emissions in the shorter periods negatively, which signifies successful environmental performance and energy management In comparison, financial development moderates the effect of real output on carbon dioxide emissions in the longer periods positively, and in which this finding again signifies that policies for energy savings and green house targets need to be established to target longer periods and energy management policies at higher levels of economic activity The present study did not confirm a significant moderating effect of financial development on the impact of energy consumption on carbon dioxide emissions in the case of Turkey

Testing the moderating role of financial development in an environmental Kuznets curve: Empirical evidence from Turkey

Defence expenditures have both costs and benefits to the economy. The costs of defence expenditures are mainly emphasized as opportunity costs. On the other hand, defence spending may have growth‐promoting potential benefits: a rise in defence spending may result in a higher aggregate demand, production and employment. This paper examines empirically the effects of military expenditures on economic growth for Middle Eastern countries and Turkey, for the time‐period 1989–1999. The relationship between military expenditure and economic growth is investigated by using cross‐section and dynamic panel estimation techniques. Empirical analysis indicates that military expenditure enhances economic growth in the Middle Eastern countries and Turkey as a whole.

http://homes.ieu.edu.tr/~aduman/econ424/defence%20exp%20and%20growth%20in%20middle%20east.pdf

Military expenditure and economic growth in middle eastern countries: a dynamic panel data analysis

This paper provides a country survey of the Turkish defence economy. Turkey is a member of NATO alliance and is strategically located between Europe and Middle East. Moreover, Turkey has a high defence burden and high economic growth. The first part of the survey presents a brief economic background of Turkey, its armed forces, the defence industry, its modernisation and trends in Turkish defence expenditure. The rest of the paper focuses on the relationships between defence spending and economic growth. The effect of defence spending on economic growth is econometrically estimated using a supply side model. Both externality effects and the size effect of defence spending are estimated for Turkey. The study concludes that defence expenditure stimulates economic growth while externalities from the defence sector to the rest of economy are negative for Turkey.

Country survey X: Defence spending in Turkey

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.

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

Although a number of studies concerning Turkish defence-growth relation have been published in recent years, little attention is given the demand for Turkish defence expenditure. This is an important issue for understanding which variables contribute to the determination of the demand for military expenditure. However, it is difficult to develop a general theory or a standard empirical approach for the determination of the demand military expenditure. This study models and estimates the demand for Turkish defence expenditure for the period 1951-1998 using autoregressive distributed lag approach to cointegration (ARDL) following the methodology outlined in Pesaran and Shin (1999). This procedure can be applied regardless of the stationary properties of the variables in the sample and allows for inferences on long-run estimates, which is not possible under alternative cointegration procedures. The findings suggest that Turkish defence spending is determined by NATO's defence spending, Greece's defence spend...

The Demand for Turkish Defence Expenditure

It is often assumed that there is trade-off between defence spending and spending on education and health, even though the empirical literature suggests mixed evidence about its nature. This study investigates the possible trade-off between Turkish defence spending and spending on health and education during the Turkish republican era. In this context, the relationship between health, education and military expenditure has been analysed within a multi-equation framework employing the Seemingly Unrelated Regression (SUR) estimation method. The main findings of this article suggest that while military spending decisions are made independently of health and education expenditure, there are trade-offs between defence and welfare spending. While the trade-off is negative between defence and health, it is positive between defence and education. Moreover, it appears that there is a competition between education and health expenditure in the budgeting process.

Selami Sezgin

Papers

Military expenditure and economic growth in middle eastern countries: a dynamic panel data analysis

Country survey X: Defence spending in Turkey

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

The Demand for Turkish Defence Expenditure

Defence, Education and Health Expenditures in Turkey, 1924-96*