Geri Anasayfa

Detay


THE RELATIONSHIP BETWEEN FINANCIAL DEVELOPMENT ENERGY CONSUMPTION AND ECONOMIC GROWTH IN TURKISH ECONOMY

Abstract
Financial development is advancement and diversification of financial tools, being processed in a country, in parallel to the developments in the world. Developing financial markets, in other words, positively affect economy ensuring full and productive use of the financial system with the increase of alternative investment tools where individuals put their savings into good use. The increase in financial development triggers energy consumption, and the increase in energy consumption also triggers economic growth. Even though all effects differ by the development levels of countries, the literature shows that there is a strong interaction between financial development, energy consumption, and economic growth. The Turkish economy related studies in the literature have investigated the relationships between energy consumption and economic growth, financial development and economic growth, energy consumption and financial development. Financial development, as a result, and resource of technological advancement considered as a development factor in data communication technologies and a production factor in internal growth patterns affects energy demand, and increasing energy demand affects economic growth as well. This study investigates the effects of financial development on economic growth in the context of energy demand that is an important component of economic growth. In the study conducted using the data of the period of 1950-2015, the long term relationship between variables was investigated by Johanson cointegration model, the casualty between those by the VAR model and Granger casualty model. The presence of a cointegration relationship was determined between the variables of financial development, energy consumption and economic growth in the consequence of the study. As a result of the casualty analysis, a unilateral casualty relationship from financial development to energy consumption and bilateral casualty relationship from energy consumption to economic growth and from economic growth to energy consumption were determined.

Keywords
Financial Development, Economic Growth, Energy Comsumption