The effect of government loan on economic growth: Application on the period of 2002-2008/2008-2019 in Turkey

Although the governments use tax revenues extensively to finance public expenditures, nowadays, it is quite a common practice to resort to borrowing. Now accepted as an ordinary income, borrowing has been concentrated rather more especially since 1980 and afterwards when external economic winds in Turkey have started to blow. There are numerous understandings such as the use fields of borrowing revenues and its inflationist effects with regard to government and its negative affectability of production and employment level excluding private sector, and its ability to lead to inequality in income distribution, and its possibility to effect investments negatively, and its potential to be able to create negative effects on economic growth due to the government’s borrowing because of some drawbacks such as forming a load on the shoulders of the future generations by causing increase in taxes besides many theories whose bases are Classics; and integrating the idle resources of economy with production through borrowing, or creating new income resources by obtaining revenues more than that of dept via investing the borrowed sources in productive fields the base of whose is Keynesyen. Therefore, there is no consensus in the literature in the governments’ approach to debt. Since the approach to debt has change and it is an easy way which governments apply for, the effects of debt on variables have entered among the most interesting subjects in literature. The effect of debt adventure on economic growth of the Republic of Turkey, who was born with debt and her dept has increased till today, was investigated with a number of empirical analyses carried out. In this study, the effect of the public debt of Turkey on growth was tried to be investigated through Granger Causality Analysis. As periods, from 2002 to the public debts in 2008 when global crisis broke out and from 2008 till today, the effects of public debts on economic growth have been comparatively investigated. And then, the debt performance was studied by analysing the effects of internal public debts and external public debts on growth in 2002-2019 period.