FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: EVIDENCE FROM TURKEY

Applied Econometrics and International Development, 2008, vol. 8, issue 1, pages 85-98

Abstract: 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 (search for similar items in EconPapers)
JEL-codes: O11 O16 O52 (search for similar items in EconPapers)
Date: 2008
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