DO SOCIAL SPENDING EFFECT ECONOMIC GROWTH? THE CASE OF TURKEY

Abstract

The aim of this study is to analyze the relation between economic growth and social spending in Turkey. In this study covering the years between 1980 and 2016, firstly, unit root analyzes are performed with the help of Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests and the series are analyzed to determine whether the series are stationary or not. In the second stage, Engle-Granger cointegration test is performed. According to the results of the cointegration test, there is no long-term relation between social expenditures and economic growth. Finally, Granger causality test is used to determine whether there is a casual relationship between the variables. According to the Granger causality test, there is a one-way causality relationship from social expenditures to GDP per capita according to the significance level of 10%.