The relationship between bank loans and economic growth, current deficit, foreign direct investments and inflation: Turkey implementation

Financial systems are an indispensable element for economic growth. The main reason for this is that these systems contribute to the formation of capital accumulation and the transfer of the collected capital to appropriate investments. The interaction between financial markets and real markets takes place through bank loans. The development in bank loans contributes to the economic development process by playing an important role in providing the financing source needed by individuals and companies in the economic development process. In the analyzes made for the period between 2003Q1-2020Q4, In the short run, a bidirectional causality relationship between loan volumes and current account deficit and loan volumes and economic growth, and a one-way causality relationship from CPI to loan volumes were determined; which is the period after 2001-2002 economic crisis (That is one of the turning points in the Turkish economy and banking sector) it is seen that there is a long-term cointegration relationship between total domestic credit volume, foreign direct investments, CPI, GDP and current account deficit. It has been determined that the deficit and GDP have a positive and significant effect on the total domestic credit volume.