The effect of external borrowing on economi̇c growth (Case of Turkey)(2000-2020)

At the present time, there are not enough financial resources to support the savings of the underdeveloped and developing states in order to achieve the desired growth rate. The low export rates in underdeveloped and developing countries cause a shortage of foreign currency. For these reasons, foreign borrowing has become a financial resource that is frequently used in underdeveloped and developing countries. Although the effect of external debt on economic growth is discussed in the literature, it has been concluded that too much external debt has a negative effect on economic growth in most of the studies. In this study, the effect of external debt on economic growth in our country has been examined with the VAR analysis and Granger Causality Test, which was made using annual data in the years 2000-2020. As a result of the analyzes applied, no causality relationship was found between external borrowing and growth. Keywords: Borrowing, External Borrowing, Economic Growth, Turkish Economy, VAR Analysis, Granger Causality Test.