Finance, Instability, Debt and Growth: The Turkish Case, 1980-2010

Mustafa Ismihan (), Burcu Dinçergök and Seyit Cilasun ()
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Burcu Dinçergök: Atilim University

No 271, EY International Congress on Economics I (EYC2013), October 24-25, 2013, Ankara, Turkey from Ekonomik Yaklasim Association

Abstract: Empirical results on the link between financial development and economic growth is mixed in Turkey. However, existing studies did not take into account the fact that Turkey has experienced endemic political and economic instabilities over extended periods. As a consequence of such instabilities, Turkish economy has shown frequent growth accelerations and collapses. Moreover, Turkish banking sector preferred to finance public borrowing rather than lending to the private sector due to the prevalence of high real interest rates on government bonds particularly during the 1990s. This study, therefore, aims to analyze the role of overall macroeconomic instability and public borrowing on finance-growth nexus in Turkey by using time series econometric techniques over the 1980-2010 period. After taking into account the effects of overall instability and public borrowing, we found a significant finance-growth link.

Keywords: Financial Development; Public Debt; Macroeconomic Instability; Growth; Turkey (search for similar items in EconPapers)
JEL-codes: E10 E20 E44 O40 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2013
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-fdg and nep-mac
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eyd:cp2013:271

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