The casuality relationship between financial markets and economic growth: Turkey samples

The financial system is a structure that provides fund flows to those with a fund deficit from more than one economic unit, which affects these flows and contributes to fund supply and accumulation. This structure has a significant impact on the transformation of savings into investments in an economy. In addition to increasing the quantitative size of a financial system in the total economy, qualitative development refers to financial development. When measuring the concept of financial development, it is observed that the criteria that assess quantitatively mostly are taken into consideration. In this thesis, the concept of financial development, with the help of variables expressing the depth and size of the financial markets, is examined with the quantitative aspect of the financial development for the Turkish economy, whether or not the impact of the economic growth has been investigated. Within the scope of the research, annual data on M2 Money Supply, Total Deposits and GDP variables recorded between 1986-2018 were evaluated. Johansen cointegration test was used for data analysis. The results of the analysis indicated that M2 money supply was effective in the increase of GDP in the determined period, while total deposits had less effect.