The Financial Development and Economic Growth Nexus for Turkey

Halicioglu, Ferda (2007): The Financial Development and Economic Growth Nexus for Turkey.

Abstract

This study investigates the validity of the demand-pulling and the supply-leading hypotheses using annual data from 1968 to 2005. The bounds testing approach to cointegration is conducted to establish the existence of a long-run relationship between financial development and economic growth. An augmented form of Granger causality analysis is implemented to identify the direction of causality among the variables both in the short-run and the long-run. The empirical findings suggest uni-directional causation from financial development to economic growth.

• Item Type: MPRA Paper
• Institution: Department of Economics, Yeditepe University
• Language: English
• Keywords: Growth; financial intermediation; causality; cointegration; Turkey
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O52 - Europe

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