EMPIRICAL ANALYSIS OF SAVINGS AND INVESTMENTS RELATION IN TURKEY: COINTEGRATION TEST WITH STRUCTURAL BREAKS APPROACH

Yıl 2017, , 106 - 111, 30.06.2017

İzzet Tasar

https://doi.org/10.17261/Pressacademia.2017.439

Öz

Purpose- The main aims of
the economic growth policies implemented by governments are to reach high and
sustainable economic growth rates. In this regard, to define the relation
between economic growth and national savings is quite impotant. Savings are
very important in terms of economic growth that makes it an important issue in
order to achieve economy policy targets.

Methodology-  In this study, the relation between savings
rates and investment rates will be investigated in the context of Feldstein –
Horioka (1980) puzzle for the Turkish economy for the period from 1980 to 2015.

Findings- Empirical findings
show that variables have unit roots. Results obtained from Bai – Perron (2003)
co-integration test which taking structural breaks into considiration show that
there is a structural break in 1999 and the time span is taken into two
sub-period. According to test results, the investigated relation between
investments and savings is weak in the first period (1980 – 1998), while it is
stronger in the second period starts from 1999 till 2015.

Conclusion- Investment rates
are above the savings rates in the entire analysis period. This situation
reveals as one of the main reason of current account deficit in Turkish
economy.

Anahtar Kelimeler

Savings, investments, structural breaks, co-integration, economic growth

Kaynakça

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