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Review article

https://doi.org/10.18045/zbefri.2016.2.529

The impacts of financial development on growth: A time-varying causality analysis for Turkey

Mehmet Zeki Ak ; Department of Economics, Faculty of Political Sciences, Sakarya University, Sakarya, Turkey
Mustafa Kirca ; Institute of Social Sciences, Anadolu University, Eskişehir, Turkey
Nurullah Altintaş ; Department of Economics, Faculty of Political Sciences, Sakarya University, Sakarya, Turkey


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Abstract

The goal of this research is to determine whether the causal relationship between
financial development and economic growth in Turkey is stable over time. For this
purpose, causal relationship between financial development and economic growth
in Turkey has been investigated by means of annual data for the period of 1960-
2013. Differently from previous studies in the literature, considering that causal
relationship between financial development and economic growth might change
depending on time, time-varying causality test developed by Balcilar, Ozdemir and
Arslanturk (2010) has been used. The results show that there is a unidirectional
causal relationship from financial development to economic growth and this
relationship changes depending on time. It is seen that unidirectional causality
from financial development to economic growth emerged during the periods of
financial turmoil and political crisis. The basic conclusion is that there is no stable
causal relationship between financial development and economic growth in Turkey
over the given time period.

Keywords

Financial development, growth, time-varying causality

Hrčak ID:

171158

URI

https://hrcak.srce.hr/171158

Article data in other languages: croatian

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