Causal Links Between Trade And Economic Growth Evidence From Turkey And European Union Countries

Openness and economic growth is discussed by heavy concentration on the deterministic relationship running from trade flows to economic growth. While traditional motive of export promotion based growth strategies is heavily discussed, it is the modern growth theories that define possible alternative mechanisms. Technology transfer, place of innovation and spillovers are at the center of the debate. However it is the more contemporary studies that also underline the possible reverse relationship. Originating from such a discussion the study aims to search for the causal relationship by working on a new European Union candidate country, Turkey. Results point out that short term dynamics illustrates a two way relationship