Asymmetric and Time-Varying Causality Between The Public and Private Sector Investment: Evidence From Turkey

Abstract

The interaction between the private and public sectors is one of the main focuses of economics. They affect each other positively or negatively. This paper aims to determine the potential dynamic impacts of the public investments on the private investments in Turkey by running asymmetric causality and to detect a structural relationship of two sectors by using nonlinear and time-varying causality. The result illustrates that there is a crowding-out effect from the public to private investment. On the other side, time-varying and nonlinear causality reach an inverse direction for the causal effects stemming from the private to the public.