Effects of bank credit to the economic growth: Convergence analysis on the basis of provinces

From the beginning of 1900, economic growth has been the subject of interest. How scientists for economic growth right by offering various opinions and ideas about economic growth contributed in the development of the theory. Many studies aimed to explain the relationship between financial markets and economic growth. As a result of these studies between economic growth and financial markets, who works one way, some studies have concluded that the two-way relationship. In addition, bank loans and economic growth on the working relationship is also available.The first part of this study; modern and neo-classical growth model which is one the Solow growth model is identified with the model was discussed in a detailed manner. Solow growth model in which the most important quality output convergence hypothesis are also described in detail.The second section is related to financial markets and financial credits. Financial markets, financial market types, agents and tools are briefly described Relationship between the real sector in financial markets that provide loans and loan types that are explained. Bank loans and economic growth has been included in the studies on the relationship.Convergence analysis made in the last chapter. Absolute (ß) beta and conditional (ß) beta have been tested. Available in 76 provinces for the period 1993-2001 in the regression analysis absolute (ß) beta of convergence has been reached. But for the 76 provinces in the conditional (ß) beta convergence, it is not. Public and private sector banks for their loans conditional (ß) beta convergence in the convergence does not have any influence. Among 76 provinces in this section sigma (?) to convergence was reached. Income distribution has improved the existing 76 provinces. Seven geographical regions between the sigma (?) convergences are not available. This divergence between the regions has been identified. Also within the region of the sigma (?) convergence in the analysis only among the Mediterranean province of Eastern Anatolia and Southeastern Anatolia becomes truly convergence was seen.Key Words: Solow-Swan, Bank Credit, Convergence