The causal relationship between defence expenditures and external debt is investigated by applying a multivariate model. Our estimation results indicate that defence expenditures and external debt for Turkey are cointegrated. To test for Granger causality in the presence of cointegration between...

It is argued that debt service burden has a negative impact on investment and capital accumulation. The main reason is that the greater percentage of reserves (foreign currency) goes to meet debt service and there will be a reduction in external capital because of a decrease in creditworthiness....

This paper investigates the relationship between external debt, defence expenditures and political business cycles in Turkey for 1960-2002. Here, two important aspects of the political business cycle, the electoral effects and the partisan effects, were investigated. The empirical finding of...