Akademik Veri Yönetim Sistemi
COMPUTATIONAL ECONOMICS, cilt.0, ss.1-19, 2025 (SCI-Expanded, SSCI, Scopus)
This article aims to examine the impact of the relationship between military expenditure, geopolitical risks, and inflation in Türkiye between 2006 and 2024 using wavelet coherence and partial wavelet coherence methods. Türkiye's geopolitical location exposes the country to both internal and external threats, making military expenditures a critical policy tool. In this context, the study uses the geopolitical risk index to measure the impact of geopolitical risks. Despite the increasing importance of geopolitical uncertainty in shaping economic outcomes, empirical research on the joint relationship between military expenditures and inflation remains limited in the literature. The study uses wavelet coherence and partial wavelet coherence techniques to fill in this gap by capturing time-frequency relationships over both short- and long-term periods. The results of the analysis show that there are times when military expenditures and geopolitical risks are in-phase (moving in the same direction) and anti-phase (moving in the opposite direction). Geopolitical risks and military expenditures appear to move in the same direction, particularly in the short term. Conversely, the relationship between inflation and military expenditures has been found to increase military expenditure in certain periods. Finally, the relationship between geopolitical risk and inflation suggests that rising geopolitical risks exacerbate inflationary pressures. These findings demonstrate that military expenditures and inflation in Türkiye interact strongly with geopolitical risks and economic pressures, and that these dynamics change over time. Consequently, Türkiye should prioritize diplomatic and regional stability initiatives to mitigate geopolitical risks, reducing the need for high military expenditure, and simultaneously implement tight fiscal policies to regulate inflation and maintain military expenditures without negatively impacting other critical sectors of the economy.