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The Relationship Of Public Domestic Debt Stock And Economic Growth: Causality Analysis For Turkey

Author

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  • Levent Kaya

    (HARRAN UNIVERSITY)

  • Çiğdem Çadırcı

    (HARRAN UNIVERSITY)

Abstract

Public borrowing is used as an important financing tool in cases where the public income and expenditure balance cannot be achieved. Economic currents evaluated the effects of borrowing and borrowing on economies differently and could not reach a common conclusion. For this reason, countries evaluate the concept of borrowing under the influence of the dominant economic currents and take decisions in this direction. The effect of the decisions taken on economic growth may differ from country to country within the framework of the policies implemented. In this study, the relationship between public domestic debt stock and economic growth in Turkey has been examined. Annual data for the period 1998-2021 were used. Relationship between variables Tsong et al. (2016) examined with the fourier cointegration test and a long-term relationship was found between the public domestic debt stock and economic growth.. The causality relationship between the variables was investigated with the Hacker-Hatemi causality test and a oneway causality was found from public domestic debt stock to economic growth. The empirical findings show that public domestic borrowing is determinant on economic growth in Turkey. The effective use of the financing source obtained through borrowing will have a positive effect on economic growth.

Suggested Citation

  • Levent Kaya & Çiğdem Çadırcı, 2022. "The Relationship Of Public Domestic Debt Stock And Economic Growth: Causality Analysis For Turkey," Ekonomi Maliye Isletme Dergisi, Adil AKINCI, vol. 5(1), pages 130-139, June.
    • Handle: RePEc:gnx:emid43:2022-5-1-1123041
    DOI: 10.46737/emid.1123041
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    Keywords

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    JEL classification:

    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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