Is Fueling the Economy with Too Much Finance Good?

Yıl 2021, Cilt: 5 Sayı: 1, 1 - 13, 07.04.2021

Ahmet Usta

Öz

This study provides evidence on the nonlinear effects of financial development on economic development and income inequality in Turkey over the period 2001 and 2010. To document how financialization affects output and income inequality, we estimate dynamic OLS (DOLS) and conduct Toda-Yamamoto Granger causality test. We find evidence of a nonlinear relationship on the financial development and economic development nexus, and financial development and income inequality nexus. In the initial period of financial development, economic development increases and income inequality widens, after a certain threshold economic development decreases and income distribution becomes more equal. We also test causality patterns and find a bilateral causation between financial development and economic development, and a one-way causality from income inequality to finance.

Anahtar Kelimeler

Financial Development, Economic Development, Income Inequality

Is Fueling the Economy with Too Much Finance Good?

Öz

Bu çalışma 2001 ve 2010 dönemlerinde Türkiye'de finansal gelişmenin iktisadi çıktı ve gelir eşitsizliği üzerindeki doğrusal olmayan etkilerine dair kanıtlar sunmaktadır. Finansallaşmanın iktisadi çıktı ve gelir eşitsizliğini nasıl etkilediğini ortaya koymak için dinamik olağan en küçük kareler yöntemini ve Toda-Yamamoto Granger nedensellik testini kullanmaktayız. Finansal gelişme ve ekonomik kalkınma ilişkisi ile finansal gelişme ve gelir eşitsizliği ilişkisinin doğrusal olmadığına dair kanıtlar ortaya koymaktayız. Finansal gelişmenin ilk döneminde, ekonomik gelişmenin arttığını ve gelir eşitsizliğinin daha da bozulduğunu gözlemlerken, belirli bir eşikten sonra ekonomik gelişmenin azaldığını ve gelir dağılımının daha dengeli hale geldiğini bulmaktayız. Ayrıca nedensellik testi ile finansal gelişme ile ekonomik kalkınma arasında iki yönlü bir Granger nedensellik olduğunu bulurken gelir eşitsizliğinden finansal gelişmeye doğru tek yönlü bir Granger nedensellik bulmaktayız.

Anahtar Kelimeler

Finansal Gelişme, İktisadi Gelişme, Gelir Eşitsizliği

Kaynakça

• Arcand, J. L., Berkes, E., Panizza, U. (2015), “Too Much Finance?”, Journal of Economic Growth, 20: 105-148.
• Bank for International Settlements, Total Credit to Private Non-Financial Sector, Adjusted for Breaks, for Turkey [CRDQTRAPABIS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/CRDQTRAPABIS, (16 March 2021).
• Beck, T., Levine, R. (2004), “Stock Markets, Banks, and Growth: Panel Evidence”, Journal of Banking and Finance, 28: 423-442.
• Chiu, Y., Lee, C. (2019), “Financial Development, Income Inequality, and Country Risk”, Journal of International Money and Finance, 93: 1-18.
• Cuesta-Gonzalez, M., Ruza, C., Rodriguez-Fernandes, J. M. (2020), “Rethinking the Income Inequality and Financial Development Nexus. A Study of Nine OECD Countries”, Sustainability, 12(13): 1-18.
• Demetriades, P., Hussein, K. (1996), “Does Financial Development Cause Economic Growth? Time Series Evidence form 16 Countries”, Journal of Development Economics, 5: 387-411.
• Dickey, D. A., Fuller W. A. (1979), “Distribution of the Estimators for Autoregressive Time Series with a Unit Root”, Journal of American Statistical Association, 74 (306): 427–431.
• Erol, I. (2019), “New Geographies of Residential Capitalism: Financialization of the Turkish Housing Market Since the Early 2000s”, International Journal of Urban and Regional Research, 43(4): 724-740.
• Greenwood, J., Jovanovic, B. (1990), “Financial Development, Growth, and the Distribution of Income”, Journal of Political Economy, 98(5): 1076-1107.
• Hassan, H. K., Sanchez, B., Yu, J. (2011), “Financial Development and Economic Growth: New Evidence from Panel Data”, The Quarterly Review of Economics and Finance, 51: 88-104.
• Karacimen, E. (2014), “Financialization in Turkey: The Case of Consumer Debt”, Journal of Balkan and Near Eastern Studies, 16(2): 161-180.
• Kuznets, S. (1955), “Economic Growth and Income Inequality”, American Economic Review, 45: 1-28.
• Lapavitsas, C. (2011), “Theorizing Financialization”, Work, Employment and Society, 25(4): 611-626.
• Lapavitsas, C. (2013), “The Financialization of Capitalism: Profiting without Producing”, City, 17(6): 792-805.
• Law, S. H., Singh, N. (2014), “Does Too Much Finance Harm Economic Growth?”, Journal of Banking and Finance, 41: 36-44.
• Nguyen, T. C., Vu, T. N., Vo, D. H., Ha, D. T. (2019), “Financial Development and Income Inequality in Emerging Markets: A New Approach”, Journal of Risk and Financial Management, 12(173): 1-14.
• Park, D., Shin, K. (2017), “Economic Growth, Financial Development, and Income Inequality”, Emerging Markets Finance and Trade, 53(12): 2794-2825.
• Peia, O., Roszbach, K. (2015), “Finance and Growth: Time Series Evidence on Causality”, Journal of Financial Stability, 19: 105-118.
• Phillips, P. C. B., Perron, P. (1988), “Testing for a unit root in time series regression”, Biometrika, 75(2): 335–346.
• Piketty, T., Saez, E., Stantcheva, S. (2014), “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities”, American Economic Journal: Economic Policy, American Economic Association, 6(1): 230-271.
• Saikkonen, P. (1991), “Asymptotically Efficient Estimation of Cointegration Regressions”, Econometric Theory, 7(1): 1–21.
• Soedarmono, W., Hasan, I., Arsyad, N. (2017), “Non-linearity in the Finance-Growth Nexus: Evidence from Indonesia”, International Economics, 150: 19-35.
• Stock, J. H., Watson, M. W. (1993), “A Simple Estimator of Cointegrating Cectors in Higher Order Integrated Systems”, Econometrica, 61(4): 783–820.
• Toda, H. Y., Yamamoto, T. (1995), “Statistical Inference in Vector Autoregressions with Possibly Integrated Processes”, Journal of Econometrics, 66: 225–250.
• TurkStat, 2020, Press Release on Income and Living Conditions Survey [Press release], 11 September, Retrieved from https://turkstatweb.tuik.gov.tr/PreHaberBultenleri.do?id=33820 (15.03.2021).
• Yeşilbağ, M. (2020), “The State-Orchestrated Financialization of Housing in Turkey”, Housing Policy Debate, 30(4): 533-558.