Nonlinear causality analysis of finance-growth relation: Evidence from Turkey

The aim of this study is to examine the causal relation between financial deepening and economic growth by means of smooth transition autoregressive (star) model-based granger causality analysis applied to the monthly data of turkey over the period 1998m1-2012m3. the results show that non-linear structure of the series should be considered as the evidence from linear and non-linear causality analysis differs. according to non-linear granger causality analysis,the financial deepening is found to be causing variable for economic growth in turkey.