The Nexus between Financial Development and Economic Growth: The Case of Turkey

Examining the possible nexus between financial development and economic growth is one of the hot topics in the finance. The relationship between financial development and economic growth is studied for the case of Turkey in this paper. Data interval includes from third quarter of 2002 to first quarter of 2015. Vector Autoregressive Model, Johansen Cointegration and Granger causality tests are used to get evidence for the possible relationship between those variables. Results showed that there is a bidirectional Granger causes in the short run and there is a one way Granger causes from economic growth to financial development in the long-run