Financial Development and Economic Growth: Evidence from Turkey
Applied Econometrics and International Development, Vol. 8, No. 1, 2008
14 Pages Posted: 30 Apr 2008 Last revised: 2 Dec 2008
In this paper we review the literature on finance-growth nexus and investigate the causality between financial development and economic growth in Turkey for the period 1975-2004. The empirical investigation is carried out in a vector autoregression (VAR) framework based on the theory of cointegration and error-correction representation of cointegrated variables. The results of the cointegration analysis provide evidence of the existence of a long-run relationship between financial development and economic growth. The empirical findings in the paper show a two way causality (bidirectional) between financial development and economic growth.
Keywords: Financial development, Growth, Turkey
JEL Classification: O11, O16, O52
Suggested Citation: Suggested Citation