Dynamical Relationship Between Economical Growth and External Debt The Case of Turkey: (1987-2014)

Serdar Öztürk; Nazife Özge Kılıç

Research Article

Dynamical Relationshıp Between Economical Growth and External Debt The Case of Turkey: (1987-2014)

Year 2017, Volume: 10 Issue: 2, 86 - 95, 03.05.2017

Serdar Öztürk Nazife Özge Kılıç

Abstract

Usage of foreign sources becomes unavoidable in the
countries where country sources and domestic savings are not sufficient to
finance economic growth and development. From this point of view, like in the
economy of developed or developing countries, external debt is an important
finance in Turkey’s economy. The main purpose of this work is to try to show
the relationship between economic growth and external debt, in Turkey. For this
aim, the annual data which shows the external debt and GDP of Turkey economy,
between 1987 and 2014, were used. The variations which existed from 1987 to
2014, were obtained as annual data from the World Bank database. The
stationarity of time series, which were used in the analyses, were examined
with Augmented Dickey Fuller (ADF) tests. As a result of the ADF unit root test,
it was seen that; external debt and economic growth variables have a unit root,
with constant and constant-trend, in the level; and, they are both stationary
in the first difference. Itis a matter of that there is two-way causation
relation from external debts variable to fixed capital investments variable.

Keywords

External Debt, EconomicGrowth, Unit Root, Co-integration

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