The relationship between financial development and poverty: An empirical study on Turkey

Poverty, which has become a global problem, is on the agenda of the world. Different policies can be implemented in the fight against the problem of poverty. Many mechanisms are used to combat poverty and in this way, poverty is tried to be minimized. Financial development is one of these mechanisms. The variety of financial instruments and the use of these instruments by everyone, and the safe and rapid flow of funds represent financial development. The aim of this study is to examine the effect of financial development on poverty through empirical analysis after considering the dimensions of poverty and financial development in Turkey. Analysis is made using annual data for the period 1980-2022. While poverty is the dependent variable from the analysis variables, it is the independent variable in financial development. The results obtained revealed a cointegration relationship between financial development and poverty in the Johansen-Co-integration test. FMOLS and DOLS methods were used to determine the long-term coefficient estimation and a positive relationship was determined between the variables.