The Asymmetric Relationship between Financial Development and Economic Growth in Turkish Economy

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JOEEP: Journal of Emerging Economies and Policy
Volume:8 Issue:2
The Asymmetric Relationship between Financial Development and Economic Growth in Turkish Economy

The Asymmetric Relationship between Financial Development and Economic Growth in Turkish Economy

Authors : Bekir Aşik

Pages : 543-558

View : 174 | Download : 89

Publication Date : 2023-12-30

Article Type : Research Paper

Abstract :With this study, symmetric and asymmetric relation between growth and financial system is investigated for Turkish economy over the period 2003.Q1-2021.Q4. Total credit private credit, total domestic credit and broad money are selected as a proxy for development of financial system and Autoregressive Distributed Lag (ARDL) method and Non-linear Autoregressive Distributed Lag (NARDL) method is employed to capture the existence of asymmetric relation between financial variables and growth. In addition to these methods, the causality between growth and financial system is investigated using Granger causality test. Results imply that there is a positive relation both in long time and in short time periods between development of financial system and growth. Furthermore, changes in total credit and broad money supply have asymmetric effect on growth. Granger causality test results indicate that ‘the supply-leading hypothesis’ is valid for Turkish economy in long time period.
Keywords : Finansal Gelişme, İktisadi Büyüme, ARDL, NARDL

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