The determination of the relationship between economic growth and interest rates in terms of economic policies

Due to the developments within the framework of globalization movements, the goal of sustainable economic growth has become one of the leading objectives of economic policies implemented worldwide. Analysis of the economic growth process in the light of developments due to globalization movements has constituted an important research area in terms of macroeconomic stability. In terms of the role of interest rates in the economic growth process, this relationship is of vital importance for economies. This study has been shaped within the framework of the validity of the relationship between economic growth and interest rates in Turkey in parallel with this process. Turkey is characterized by a high trend in the level of interest rates due to its structural conditions. Considering that economic growth rates have a fluctuating structure parallel to the increase in interest rates, the relationship between economic growth and interest rates gains importance in determining the macroeconomic policies to be implemented in the country. In this context, this study deals with the relationship between economic growth and interest rates within the scope of short and long-term analysis depending on the period examined and the methods used. Based on this process, this study investigates the relationship between economic growth and interest rates in Turkey by using ADF and PP Unit Root Test, ARDL Border Test and Toda-Yamamoto Causality Test within the scope of annual data for the period 1985-2020.