PUBLIC EXPENDITURE - ECONOMIC GROWTH: AN APPLICATION ON TURKEY

The relationship between public expenditures and economic growth is a considerably debated question in the literature. Especially, most of the empirical studies analyze the relationship between public expenditures and economic growth. There are many studies about increase of public expenditures cause economic growth and an increase in economic growth causes increasing public expenditures in literature. In this study, the relationship between public expenditures and economic growth is examined using Turkey’s quarter period data for the period of 1998-2000. The relationship between public expenditures and economic growth is investigated using ARDL (Autoregressive Distributed Lag) approach and Toda-Yamamoto causality test. The results suggest that there is long run equilibrium relationship between public expenditures and economic growth. The result of Toda-Yamamoto causality test indicates no causality between public expenditures and economic growth.