An analysis of the interaction among savings, investments and growth in Turkey

Abstract

Turkey has been implementing tight fiscal and monetary policies for years. These policies rely on the basic understanding that savings trigger growth and investments. However there are alternative theoretical discussions and empirical findings related to the interaction among these variables. In this study, while one of the purposes is to analyse the interaction among these variables for the Turkish case, the other is to try to bring an insight for other developing countries for the issues such as data production, econometric analysis, and as well as making policy suggestions in line with the evidence from the Turkish case. The findings of this study show that, it is the growth that induces both savings and investments. Hence, it is necessary to question policies that assume it is the savings triggering growth and investments.