Direction of Causality between Financial Development and Economic Growth in Turkey | Zendy

Cengiz Yılmaz | Zendy; Banu Demirhan | Zendy

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Direction of Causality between Financial Development and Economic Growth in Turkey

Author(s) -

Cengiz Yılmaz,

Banu Demirhan

Publication year - 2021

Publication title -

journal of economics management and trade

Language(s) - English

Resource type - Journals

ISSN - 2456-9216

DOI - 10.9734/jemt/2021/v27i930365

Subject(s) - causality (physics) , economics , construct (python library) , gross domestic product , money supply , monetary economics , broad money , granger causality , econometrics , economic indicator , macroeconomics , monetary policy , computer science , physics , quantum mechanics , programming language

This paper has investigated the causality relationship between financial development and economic growth in Turkey, using data from 2005:04 to 2020:03. We construct a time-series model to explore causality relationships between the variables. In the study, two indicators were used as financial development indicators: banking loans to the private sector and money supply to GDP (Gross Domestic Product). The empirical results have represented a bi-directional relationship between financial development and economic growth in the short run. On the other hand, we have not found a causality relationship in the long term.

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