Evaluating the relationship between public expenditures and economic growth for Turkey

Abstract

Since ancient times government has always taken part in economy. Government makes expenses for its basic functions (justice, security, infrastructure etc.). However, the idea of increasing public expenditures that dominated the world after the World War II started to be discussed in 1970s. Today, governments are in the opinion of adjusting public expenditures to ensure economic growth. In this study, 3-month data covering the period 1998:01-2011:04 are examined for Turkey to determine whether or not public expenditures have any effect on economic growth. A unidirectional causality is found between GDP and public expenditures. The direction of causality is from GDP to economic growth. © Suna Korkmaz, 2013.