Examination Of The Relationship Between Financial Development And Economic Growth: Case Of Turkey

Abstract

The relationship between economic growth and financial development is investigated within the framework of this study in which financial development is examined under three sections including banking development, stock market development and debt market development. Examination is made by using quarterly data of Turkey for the period 2003Q12016Q1. At the end of study, a unidirectional relationship is found from stock market development to economic growth which validates “Supply Leading Hypothesis”. From the perspective of banking development and debt market development, way of causality relationship validates “Demand Following Hypothesis”.