Abstract:

This study examines the relationship between public spending and economic growth in Turkey. For this purpose, the proportion to GDP of public spending for the 1990-2018 period and the real GDP variables per person were used by the Johansen co-integration test, Granger causality test and the Method of the Smallest Quadrates (EEC). According to Johansen’s co-integration test, there is a combination between public spending and economic growth. According to the Granger Causability Test, there is a one-way causal relationship from public spending to economic growth. According to the ECK method, the sensitivity of economic growth to public spending has been statistically meaningful and reverse proportionate. The increase in public spending has a negative impact on economic growth. Therefore, the reduction of the public weight in Turkey has been achieved to have a positive impact on economic growth.

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