Open AccessDirection 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.