The impact of military spending on macroeconomic performance has been a long-debated issue. In this context, there are a vast number of studies focused on the impact of military spending on the economies and the direction of this impact. Most of these studies have examined the relationship between military spending and economic growth. Unemployment, however, is a macroeconomic indicator that cannot be separated from economic growth. Hence, this study aims to reveal the relationship between military spending and the unemployment rate of Turkey, which is a developing country. To this end, Bounds Testing approach based on the structural break Autoregressive Distributed-Lag Model (ARDL) has been performed to suggest the impact of the military spending on the unemployment rate, using the 1988-2017 period data of Turkey. The findings demonstrate that there is no statistically significant correlation between the military spending and unemployment rate in the short run; however, it is determined that the military spending decreases the unemployment rate in the long run.

The effects of arms imports, which is the major defense spending item, on the macroeconomic performances of developing countries is a long-debated issue. Therefore, this study aims to determine the impact of arms imports on economic growth, which lead to large deficits in the balance of payments of Turkey. Among the defense spending items, the arms imports have the greatest impact potential on the economies of countries. For this purpose, Bounds Testing based on the structural break Autoregressive Distributed Lag Model (ARDL) was performed to determine the impact of the arms import on economic growth, using the 1990-2017 period data of Turkey. According to the test results of the study, no statistically significant correlation was found between the arms imports in Turkey and economic growth in the short run, but it was found that the arms imports have a negative impact on the economic growth in the long run.