What are the factors that drive economic growth? evidence from Turkey

Mehdi Baddou and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: The paper focuses on the factors determining the economic growth. Turkey is used as a case study. Because of the regional tensions in the Turkish region, we want to help the policy makers know what factors of economic growth they should focus on to promote growth. The standard time series techniques are used for the analysis. The findings tend to indicate that the GDP is the most endogenous (i.e., dependent) variable and the inflation rate is the most exogenous (i.e., independent) variable. Based on the generalized variance decompositions, it appears that the Granger-causal chain is driven mainly by the inflation rate leading to gross capital formation, Government consumption, trade openness and GDP. Our findings recommend that the Turkish policy makers should focus on the above factors to enhance economic growth.

Keywords: Economic Growth; Trade Openness; Inflation; Granger-Causality; Turkey (search for similar items in EconPapers)
JEL-codes: C22 C58 O11 (search for similar items in EconPapers)
Date: 2018-04-18
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111202

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