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The Effect of Military Expenditures on the Profit Rates in Turkey


  • Elveren, Adem Yavuz
  • Özgür, Gökçer


This paper analyses the effects of military expenditure on the rate of profits in Turkey during the period of 1950–2008 by employing a Markov-switching autoregression model within a Marxist framework for the first time. Findings show that the effect of military expenditure on profit rates is nonlinear—negative during turbulent years and positive in more tranquil years. The negative effects are larger than positive effects, but the probability of positive effects prevailing is larger.

Suggested Citation

  • Elveren, Adem Yavuz & Özgür, Gökçer, 2018. "The Effect of Military Expenditures on the Profit Rates in Turkey," MPRA Paper 88848, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:88848

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    References listed on IDEAS

    1. Nordhaus, William & Oneal, John R. & Russett, Bruce, 2012. "The Effects of the International Security Environment on National Military Expenditures: A Multicountry Study," International Organization, Cambridge University Press, vol. 66(3), pages 491-513, July.
    2. Fred M. Gottheil, 1986. "Marx versus Marxists on the Role of Military Production in Capitalist Economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 8(4), pages 563-573, July.
    3. Ceyhun ELGİN & Tolga Umut KUZUBAŞ, 2012. "Wage-Productivity Gap in Turkish Manufacturing Sector," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 27(316), pages 09-31.
    4. James Cypher, 1974. "Capitalist Planning and Military Expenditures," Review of Radical Political Economics, Union for Radical Political Economics, vol. 6(3), pages 1-19, October.
    5. Adem Y. Elveren, 2012. "Military Spending and Income Inequality:Evidence on Cointegration and Causality for Turkey,1963--2007," Defence and Peace Economics, Taylor & Francis Journals, vol. 23(3), pages 289-301, April.
    6. Magdoff, Harry, 1970. "Militarism and Imperialism," American Economic Review, American Economic Association, vol. 60(2), pages 237-242, May.
    7. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    8. Elveren, Adem Yavuz & Dunning, Rachel, 2017. "Do Military Expenditures Boost Profit Rates?," MPRA Paper 81143, University Library of Munich, Germany.
    9. Reich, Michael, 1972. "Does the U.S. Economy Require Military Spending?," American Economic Review, American Economic Association, vol. 62(2), pages 296-303, May.
    10. Adem Y. Elveren & Sara Hsu, 2016. "Military Expenditures and Profit Rates: Evidence from OECD Countries," Metroeconomica, Wiley Blackwell, vol. 67(3), pages 551-577, July.
    11. Ron Smith & Martin Sola & Fabio Spagnolo, 2000. "The Prisoner's Dilemma and Regime-Switching in the Greek-Turkish Arms Race," Journal of Peace Research, Peace Research Institute Oslo, vol. 37(6), pages 737-750, November.
    12. Goldfeld, Stephen M. & Quandt, Richard E., 1973. "A Markov model for switching regressions," Journal of Econometrics, Elsevier, vol. 1(1), pages 3-15, March.
    13. Ünal Töngür & Adem Yavuz Elveren, 2016. "The impact of military spending and income inequality on economic growth in Turkey," Defence and Peace Economics, Taylor & Francis Journals, vol. 27(3), pages 433-452, June.
    14. Christos Kollias & Thanasis Maniatis, 2003. "Military expenditure and the profit rate in Greece," Defence and Peace Economics, Taylor & Francis Journals, vol. 14(2), pages 117-127.
    15. Duygu Yolcu Karadam & Jülide Yildirim & Nadir Öcal, 2017. "Military expenditure and economic growth in Middle Eastern countries and Turkey: a non-linear panel data approach," Defence and Peace Economics, Taylor & Francis Journals, vol. 28(6), pages 719-730, November.
    16. Smith, R P, 1977. "Military Expenditure and Capitalism," Cambridge Journal of Economics, Oxford University Press, vol. 1(1), pages 61-76, March.
    17. Töngür, Ünal & Hsu, Sara & Elveren, Adem Yavuz, 2015. "Military expenditures and political regimes: Evidence from global data, 1963–2000," Economic Modelling, Elsevier, vol. 44(C), pages 68-79.
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    Cited by:

    1. Adem Yavuz Elveren & Sara Hsu, 2018. "The Effect of Military Expenditure on Profit Rates: Evidence from Major Countries," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 4(2), pages 75-94, December.

    More about this item


    military expenditures; profit rate; Turkey;

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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