THE EFFECT OF COMMERCIAL BANK DEPOSITS AND CREDITS ON ECONOMIC CROWTH IN TURKEY

Abstract

One of the most important functions of the banking sector is to fulfill financial intermediation by establishing important
connections between savings and investments. Banking activities have an accelerating effect on economic growth. For
this reason, the relationship between financial activities in the banking sector and economic growth has been subject to
many empirical studies.
In this study, the relationship between banking activities and economic growth, which is one of the important discussion
topics in economics literature, is being tried to be determined for Turkey. In order to determine the relationship between
bank credits- deposits and GDP, three-monthly data for the period 2002:1-2015:4 have been used in this study. Time
series model estimation, cointegration test and causality test were used in the econometric analysis.
According to findings, there is a bidirectional causality relationship between bank credits and GDP in the long-term, but
no causal relationship between deposits and GDP.