Rashad Salahov

Analyzing the connection between military expenditure and economic growth is interesting due to its policy implications, particularly in geopolitically strategic regions. In the case of Azerbaijan, where defense spending accounts for a significant share of the national budget, this relationship is especially relevant. The present study explores the long-term equilibrium between military expenditure, expressed as a percentage of GDP, over a three-decade period marked by consistent economic growth and substantial defense investments. To investigate this relationship, the study applies the Johansen cointegration method to check for a stable long-term relationship. It employs the Granger causality test to determine the causal direction between the variables. The findings show cointegrating relationships, indicating a long-term equilibrium between military expenditure and economic growth. Furthermore, the Granger causality analysis indicates a bidirectional causal link, implying that changes in military expenditure influence GDP per capita growth and vice versa. Specifically, the results show that military expenditure Granger causes GDP per capita at a lag of 3 (p-value = 0.012). Similarly, GDP per capita Granger causes military expenditure at the same lag (p-value = 0.0001). The findings reveal the dual impact of military spending on economic development, providing insights for Azerbaijani policymakers to balance defense needs with economic growth.

The paper investigates the causal interaction between renewable energy consumption and manufacturing value added in Kazakhstan, a relationship of growing importance in the context of sustainable industrial development. The aim of the study is to assess the direction and nature of causality between these variables over the period from 2000 to 2021. To this end, the Toda-Yamamoto Granger causality test is applied, offering robust results regardless of the order of integration of the time series data. The empirical analysis identifies a statistically significant bidirectional causal relationship. Specifically, renewable energy consumption has a significant impact on manufacturing value added (p = 0.003), while manufacturing value added also significantly influences renewable energy consumption (p = 0.006). These findings reveal a reciprocal mechanism in which the expansion of renewable energy supports industrial growth, and industrial development, in turn, enhances renewable energy usage. The results underscore the strategic importance of integrating renewable energy policies with industrial development plans. From a policy perspective, the study provides practical insights into fostering sustainable economic growth by aligning environmental and industrial objectives in Kazakhstan.

Type of the article: Research Article

Abstract
This study analyzes the causal relationships between economic growth, inflation, exports, and domestic credit to the private sector in Turkey using annual data covering the period from 1990 to 2024, obtained from the World Bank and the Turkish Statistical Institute. The empirical strategy is based on a Vector Autoregressive (VAR) modeling framework combined with the Toda–Yamamoto Granger causality approach, with the long-run interactions among the variables further examined through Johansen cointegration analysis. This integrated methodology allows for a comprehensive assessment of both short-run dynamics and long-term equilibrium relationships in the Turkish macro-financial system. The empirical findings from the Toda–Yamamoto causality tests reveal statistically significant causal effects running from exports of goods and services, economic growth, and inflation to domestic credit to the private sector. Specifically, exports (EXGS), GDP growth (GDPG), and inflation (INF) each exert a meaningful influence on domestic private sector credit (DOCR), indicating that historical movements in these macroeconomic variables possess substantial explanatory and predictive power for credit dynamics. These results underscore the importance of real economic activity, external trade performance, and price stability in shaping the evolution of financial intermediation in Turkey. From a policy perspective, the results imply that maintaining export competitiveness, promoting stable and inclusive economic growth, and ensuring low and predictable inflation are essential for improving private sector credit access, reinforcing financial sector performance, and fostering sustainable economic development and macroeconomic stability in Turkey.