The Causality Between Public Expenditures and Economic Growth in Recent Times; Evidence from Turkey

Abstract

Provided the results of the political elections in the economy of turkey together with the decision made by the government to foster growth and minimize spending, this research primary looks at the causality trend between total government expenses and growth of national income. Using World bank data from the period 2000 to 2021. The granger causality fails to confirm causality between government expenditure and national income the Toda Yamamoto concretely confirms bi-directional or two-way cause effect relationship between government income and total government expenses. Also, findings from the ARDL estimation, show that an increase in national income will reduce government expenditure, and as inflation continue to increase a large portion of government income will be spent.