Özet:

In the event of tax revenues falling short of financing the budget deficits which occur as the result of state’s intervention to economy for the purposes of economic stability, economic growth and of ensuring justice in income distribution by increasing public investment expenditures, borrowing is opted, thus crowding out effect occurs.The crowding out effect of public investments on private sector investments in Turkey, for the period of 1986-2014 is analayzed with Johansen Cointegration Test, Least Squares Method and Engle Granger Causality Test. According to the analysis results; it is observed that public fixed capital investments crowd out private sector fixed capital investments, public investments are not the granger cause of private sector investments and private sector investments are not the granger cause of public investments.

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