(The Impact of Public Expenditure on Economic Growth: 1990-2017 Case of Turkey)

Abstract

Purpose – The aim of this work in the period between 1990-2017 years of the impact on economic growth, public expenditure for Turkey to examine different ways. Design/methodology/approach – In the first part of the study, conceptual explanation and literature summary about the subject is presented. In the second study, information about the model and the method to be used is given. In the third part, the effect of public expenditures and trade deficit on dependent variable GDP was examined by Gregory-Hansen cointegration test and ARDL limit test. In addition, since the empirical model is based on the Cobb-Douglas production function, capital and labor are included as independent variables. The data used in the study were obtained from World Bank development indicators.. Results and Discussion – As a result of the findings obtained in the study, it was observed that the effect of public expenditures, capital accumulation and labor on national income were positive in the long and short term, and the effect of break in 2007 on GDP in the long and short term was negative and statistically significant. In addition, in the short run, there is no causality from public expenditures and trade openness to GDP, one-way causality from capital accumulation and labor to GDP, and in the long run, one-way causality between capital accumulation, labor and GDP, bidirectional, commercial openness and public spending to GDP has been concluded.