Country survey X: Defence spending in Turkey

This paper provides a country survey of the Turkish defence economy. Turkey is a member of NATO alliance and is strategically located between Europe and Middle East. Moreover, Turkey has a high defence burden and high economic growth. The first part of the survey presents a brief economic background of Turkey, its armed forces, the defence industry, its modernisation and trends in Turkish defence expenditure. The rest of the paper focuses on the relationships between defence spending and economic growth. The effect of defence spending on economic growth is econometrically estimated using a supply side model. Both externality effects and the size effect of defence spending are estimated for Turkey. The study concludes that defence expenditure stimulates economic growth while externalities from the defence sector to the rest of economy are negative for Turkey.     

Estimating defence budget saving from disarmament: the United States’ case

Probing the technology in the production of US national defence by using a dynamic cost‐function model with adjustment costs, this paper evaluates the effect of reducing the level of national defence on the defence budget saving. Our inquiry involves estimating the defence production structure without output data for non‐market goods that are normally unavailable. Our findings include: (i) the United States behaves rationally to minimize cost in the production of national defence; (ii) the adjustment costs are larger in disarmament than in military build‐up; (iii) due to the adjustment costs peculiar to disarmament, the defence budget saving from disarmament appears small, but cutbacks allow great savings on the defence budget.     

MILITARY EXPENDITURE AND GRANGER CAUSALITY: A CRITICAL REVIEW

A large literature has used tests for Granger (1969) non‐causality, GNC, to examine the interaction of military spending with the economy. Such tests answer a specific although quite limited question: can one reject the null hypothesis that one variable does not help predict another? If one can reject, there is said to be Granger causality, GC. Although the limitations of GNC tests are well known, they are often not emphasised in the applied literature and so may be forgotten. This paper considers the econometric and methodological issues involved and illustrates them with data for the US and other countries. There are three main issues. First, the tests may not be informative about the substantive issue, the interaction of military expenditure and the economy, since Granger causality does not correspond to the usual notion of economic causality. To determine the relationship of the two notions of causality requires an identified structural model. Second, the tests are very sensitive to specification. GNC testing is usually done in the context of a vector autoregression, VAR, and the test results are sensitive to the variables and deterministic terms included in the VAR, lag length, sample or observation window used, treatment of integration and cointegration and level of significance. Statistical criteria may not be very informative about these choices. Third, since the parameters are not structural, the test results may not be stable over different time periods or different countries.     

Concept costing for defence projects: the problem and its solution

It is intrinsic to the nature of military competition that the unit acquisition costs of defence systems rise generation by generation. Traditional “bottom‐up” methods of cost‐estimating cannot meet the increasing demands for extensive studies of many options before commencing design and, while “top‐down” estimating techniques are an improvement, in particular by reducing the time required for preparing estimates, they also are inadequate to meet current requirements. A new method has been devised, therefore, further developing “top‐down” methods using Bayesian techniques to make best use of the available information, whether certain or uncertain, and its accuracy established by example.     

DOES MILITARY EXPENDITURE MATTER FOR INFLATION AND ECONOMIC GROWTH?

This paper sets up a monetary endogenous growth model, and uses it to explain the ambiguous linkage between the military burden and the inflation rate observed in existing empirical studies. It is found that an expansion in the military burden has an ambiguous effect on the inflation rate depending upon the relative extent of two conflicting forces. More specifically, if the increase in the marginal benefit from holding money exceeds (falls short of) the increase in the marginal product of private capital, the inflation rate will rise (fall) in response. Moreover, it is found that an increase in the military burden will stimulate the balanced growth rate, confirming Benoit’s famous empirical findings.     

DEFENSE SPENDING AND ECONOMIC GROWTH IN TURKEY: A LINEAR AND NON‐LINEAR GRANGER CAUSALITY APPROACH

This paper uses linear and non‐linear Granger causality methods to determine the causal relationship between defense spending and economic growth in Turkey for the period 1949–2004. The innovative feature of this paper is that it provides evidence regarding the nonlinear causal dependence between military spending and economic growth in Turkey. The empirical results contribute to the empirical literature by indicating support for both linear and non‐linear causality between military expenditures and economic development and they may prove useful in theoretical and empirical research by regulators and policy makers.     

Book Reviews

Patrick Finney (ed.), The Origins of the Second World War. London: Arnold, 1997. Pp.xvi + 461, index. £15.99. ISBN 0–340–67640‐X.

Maria Emilia Paz, Strategy, Security, and Spies: Mexico and the US as Allies in World War II. University Park, PA: The Pennsylvania State University Press, 1997. Pp.xii + 264, 10 illus., biblio., index. $55 (cloth); $19.95 (paper). ISBN 0–271–01665–5 and 01666–3.

Norman J.W. Goda, Tomorrow the World: Hitler, Northwest Africa and the Path toward America. College Station, Texas A&;M University Press, 1998. Pp.xxvi + 307, 2 maps, biblio., index. $39.95. ISBN 0–89096–807–1.

Michael J. Hogan, A Cross of Iron: Harry S. Truman and the Origins of the National Security State, 1945–1954. Cambridge; New York: Cambridge University Press, 1998. Pp.xii + 525, biblio., index. £25; $34.95. ISBN 0–521–64044‐X.

Stephen Van Evera, Causes of War: Power and the Roots of Conflict. Ithaca, NY: Cornell University Press, 1999. Pp.viii + 270, index. $35. ISBN 0–801403201–4.

Eric Arnett (ed.), Nuclear Weapons and Arms Control in South Asia after the Test Ban, SIPRI Research Report No.14. Oxford: Oxford University Press/Stockholm Int Peace Research Institute, 1998. Pp.viii + 98, index. £12.99. ISBN 0–19–8294115.

T.V. Paul, Richard J. Harknett and James J. Wirtz (eds.), The Absolute Weapon Revisited: Nuclear Arms and Emerging International Order. Ann Arbor, Michigan: The University of Michigan Press, 1998. Pp.vi + 312, index. $47.50/£36. ISBN 0–472–10863–8.     

Determination of burn‐in parameters and residual life for highly reliable products

Today, many products are designed and manufactured to function for a long period of time before they fail. Determining product reliability is a great challenge to manufacturers of highly reliable products with only a relatively short period of time available for internal life testing. In particular, it may be difficult to determine optimal burn‐in parameters and characterize the residual life distribution. A promising alternative is to use data on a quality characteristic (QC) whose degradation over time can be related to product failure. Typically, product failure corresponds to the first passage time of the degradation path beyond a critical value. If degradation paths can be modeled properly, one can predict failure time and determine the life distribution without actually observing failures. In this paper, we first use a Wiener process to describe the continuous degradation path of the quality characteristic of the product. A Wiener process allows nonconstant variance and nonzero correlation among data collected at different time points. We propose a decision rule for classifying a unit as normal or weak, and give an economic model for determining the optimal termination time and other parameters of a burn‐in test. Next, we propose a method for assessing the product's lifetime distribution of the passed units. The proposed methodologies are all based only on the product's initial observed degradation data. Finally, an example of an electronic product, namely contact image scanner (CIS), is used to illustrate the proposed procedure. © 2002 Wiley Periodicals, Inc. Naval Research Logistics, 2003     

一种无人战斗机系统使用保障费用分析方法

基于无人战斗机系统在使用保障上的特点,通过对有人战斗机使用保障费用模型进行合理改造,使其能适用于无人战斗机的使用保障费用分析。经过改造的模型具有结构清晰、概念明确的特点。适合在飞机总体设计阶段用于全寿命周期的费用估算以及飞机的费效分析和综合优化设计。通过与有人战斗机的使用保障费用进行对比计算表明,无人战斗机系统的使用保障费用具有明显的经济优势。     

复合成本计算中合理设定复合元数问题研究

从合理性和科学性角度对复合成本计算过程中复合元数的设定进行了评价。运用模糊数学方法建立了评价矩阵,通过模糊合成使评价结果更加切合实际,解决了企业成本管理中复合元数判断的模糊性和不确定性问题,避免了复合成本计算过程中因复合元数设定不经济或简单化而出现的功能过剩或功能不足的现象出现。