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Financial Development, Savings, and Economic Growth in Turkey

Burcu Kiran, Nilgün Çil Yavuz, Burak Guris


This paper investigates empirically the existence of a long-run relationship between financial development and economic growth in Turkey over the period from 1968 to 2007 and includes savings as a third important variable that affects both financial development and economic growth. We used an endogenous break unit root test as suggested by Zivot and Andrews (1992) and the Gregory-Hansen (1996) cointegration technique. We estimated the
cointegrated vectors using the dynamic ordinary least square (DOLS) procedure developed by Stock and Watson (1993). The empirical results showed a long-run relationship between financial development, savings, and economic growth.


financial development, economic growth, endogenous structural breaks, cointegration

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