The relationship between external debt and economic growth: An asymmetric co-integration analysis

WOS: 000290059000004The relationship between external debt and economic growth: An asymmetric co-integration analysis In most developing economies, debt stocks tend to increase and borrowing isn't always used to finance the productive investments. So, in the long-term economic analysis, there may be non-linear debt-growth relationship. In this study long-term relationship between external debt and economic growth for Turkish economy was investigated in this context. In the analysis, TAR and M-TAR co-integration models which allow asymmetric adaptation are used in addition to linear Engle Granger co-integration method. The findings can be summarized as follows: Firstly external debt and economic growth are co-integrated in all methods in Turkish economy. Secondly, TAR model has better results than others. Finally relationship between external debt and economic growth is asymmetric in the long term