The Relationship Between Public Expenditures and Economic Growth: Empirical Evidence For Turkey

The purpose of this paper is to analyse the linkages between public expenditure, the components of public expenditure and economic growth in turkish economy. building on the barro’s (1990) endogenous growth model, ardl bound test and var granger causality/block exogeneity wald test approaches are adopted as econometric tools over the period of 1960-2009 for turkey. the empirical results support wagner hypothesis for the relationship between economic growth and public expenditure. however, the direction of causality is understood to change when disaggregated accounts of public expenditure with respect to economic categories are included in our analysis.