Author: İsmail Aktar, Abdulkadir Civan
Publisher/Publication: Dumlupinar Universitesi Sosyal Bilimler Dergisi
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Abstract: In this paper İsmail Aktar and Abdulkadir Civan examine the long-run relationship between the military spending of Turkey and Greece, two NATO allies and neighboring countries that have a history of disputes and hostility. They use data from 1949 to 2001 and apply the Augmented Dickey-Fuller test and the Johansen cointegration test to analyze the stationarity and cointegration of the series. They find evidence of a long-run relationship between the two countries’ military spending, indicating that they are influenced by each other’s defense policies. They also use the error correction model to show how the cointegration vector affects the military spending of both countries. Their work contributes to the literature on the arms race between Turkey and Greece by using a longer data period and a different data source than NATO. Part of the econometric school of study of the post-1945 Greek-Turkish military expenditure and possible arms racing.