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Banking Sector Instability and Economic Growth: Evidence from Turkey

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  • Yılmaz Bayar
  • Murat Gündüz
  • Funda H. Sezgin

Abstract

The banking sector, an important component of the financial system, can affect the economic growth through raising and mobilizing the savings, channeling the funds to the productive uses and enhancing the efficiency. However, the deteriorations in the banking sector stability may negatively affect the economic growth through preventing the efficiently functioning of the aforementioned interaction channels. This study investigates the effect off banking sector instability and banking sector development on the economic growth in Turkey during August 2006-December 2018 through time series analysis. We revealed that the banking sector instability negatively affects the economic growth, but banking sector development positively affects the economic growth.

Suggested Citation

  • Yılmaz Bayar & Murat Gündüz & Funda H. Sezgin, 2019. "Banking Sector Instability and Economic Growth: Evidence from Turkey," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 7(2), pages 263-274, December.
    • Handle: RePEc:anm:alpnmr:v:7:y:2019:i:2:p:263-274
    DOI: http://dx.doi.org/10.17093/alphanumeric.641629
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    More about this item

    Keywords

    Banking Sector Development; Banking Sector Instability; Economic Growth; Financial Development; Time Series Analysis;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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