Abstract:

In recent years, the literature has seen the success of the general economy as the financial system and the association of economic growth has become widespread, but the impact of the curriculum gap on the financial system that causes structural breakdown is among the topics worth discussing. The phenomenon of financial deepening, which represents the increase in the number of financial instruments a country possesses and the widespread use of these instruments, will have an impact on the currency, leading directly to the entry of foreign capital. The aim of this study is to test the relationship between the economic open and financial deepening for the Turkish economy. In the study, using the data of the Turkish economy between the years 1990-2019, the relationship between economic open and financial deepening was analyzed with the Vector Otoregressive Model (VAR) model. In this context, the stagnation of the variables was first tested, after which a long-term relationship between the variables was analysed by the Johansen Integration test. The Granger Cause Analysis was subsequently conducted on the basis of VECM in order to identify the direction of the relationship between the variables. Finally, the results obtained by Varyans separation and Effect-Refect analysis were supported. The analysis has shown that financial deepening is an important factor on the open source and that the effect is increasing over time.

Keywords: