Abstract
In this investigation, the causal link among financial development and economic activity is explored to determine whether the supply leading hypothesis (SLH) or the demand following hypothesis (DFH) is valid for the Turkish economy. For this aim, the study employs the Fourier Toda-Yamamoto causality test of Nazlioglu, Gormus, and Soytas (2016) by utilizing annual data covering 1980-2020. To proxy financial development, the Financial Development Index (FDi) of IMF and its eight sub-indices are chosen. The findings of this work show that the FDi Granger causes per capita income in Turkey. Therefore, one can say that the SLH holds for the Turkish economy at the aggregate level. The disaggregated level of data differs across sub-indices. The empirical findings of the paper provide significant policy implications for the economic agents.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
