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ID: 144120

Impact of military spending and income inequality on economic growth in Turkey / Töngür, Ünal; Elveren, Adem Yavuz

Elveren, Adem Yavuz	Article
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Summary/Abstract

An extensive literature on the effect of military expenditures on economic growth yields conflicting results. However, a crucial issue that has not been investigated in this context is the possible effect of inequality. The impact of military expenditures on economic growth in Turkey has also received substantial attention. Yet, the majority of these studies are not constructed based on a structural model, but rather examine the causality between the variables in question. Considering these two shortcomings in the literature and the lack of consistent results, this study attempts to provide further evidence for the relationship between military expenditures and economic growth for the case of Turkey by considering income inequality within an augmented Solow growth model. Our findings for the 1963–2008 period show that while income inequality has a positive impact on economic growth, military expenditures have no significant effect.

Key Words

Military Expenditure ; Human Capital ; Growth ; Income Inequality ; Solow Growth Model

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ID: 123431

Role of the financial sector in the Turkish Cypriot economy: evidence from bounds and causality tests / Fethi, Sami; Katircioglu, Salih; Caglar, Dilber

Katircioglu, Salih	Journal Article
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2013.

Summary/Abstract

This paper investigates the link between financial development and economic growth in a small island economy, North Cyprus. Bounds testing approaches as well as causality techniques are conducted for analyzing an extended version of the augmented Solow growth model over the period 1977-2010. The empirical results suggest that investments in the financial and banking sectors are important drivers for real income growth in both the long and short terms of the North Cyprus economy. The findings also show that private credits in the financial sector do not cause output growth in either the long- or the short-term periods. The impact of physical capital for real income is not also found to be as strong as that of human capital in the case of the North Cyprus economy.

Key Words

Economy ; Turkey ; Economic Growth ; Human Capital ; Financial Development ; North Cyprus ;
Solow Growth Model ; North Cyprus Economy

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