Abstract:

This study it is aimed to test the relationship between private sector loans extended by banks and economic growth in Turkey. For this purpose, annual data for the period 1980-2019 were used. The Johansen cointegration test was used to test the existence of the long-term relationship between private sector loans on growth, and the Toda Yamamoto causality test was used to determine the existence and direction of the causality relationship. In the model established in the study, real GDP represents economic growth, the share of loans extended by banks to the private sector in GDP as representing private sector loans, and the share of gross capital formation in GDP representing capital and the number of employed people (per million persons) representing labor force are included as control variables. According to the results of the analysis made within the framework of this model, it has been determined that private sector loans and economic growth are cointegrated, and there is a two-way causality relationship between them.

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