The Relationship Between the Financial Development and Economic Growth: An Empirical Application for Turkey

Yıl 2018, Cilt: 9 Sayı: 2, 116 - 123, 03.01.2019

Ali Şen , Ceren Pehlivan

Öz

The
relationship between financial development and economic growth has been
extensively analysed.  It is generally
hold that financial development is crucial for economic growth. The growth of financial development enables the capital to
be used more efficiently, increases the investment and production in parallel
with the credit provided to the market, and fosters the economic growth. In
this study, the relationship between financial development and economic growth
was investigated with the quarterly data for the period of 1985-2016.
Toda-Yamamoto causality tests were employed to determine the existence and the
direction of causality among the variables. 
The main empirical finding in this paper is that the financial growth has a positive effect on
economic growth. This result was also confirmed by the results of analysis
related to ''supply-leading'' hypothesis put forward by Patrick (1966).

Anahtar Kelimeler

Financial Development, Economic Growth, Toda-Yamamoto Causality Tests

Kaynakça

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