THE IMPACT OF TRADE AND FINANCIAL OPENNESS ON ECONOMIC GROWTH IN TURKEY: A SURVEY ON THE 1992-2006 PERIOD

This paper examines the long run impact of trade and financial openness on economic growth in Turkey for the 1992-2006 period by using the Bounds test approach proposed by Pesaran, Shin and Smith (2001) based on Unrestricted Error Correction Model and Toda ve YamamotoÕs (1995) causality test. Empirical results from the Bounds test indicate there exist a long run relationship between trade and financial openness and economic growth in Turkey . In addition, Toda Ð Yamamoto causality test results show that there is a bi-directional causality between trade openness and economic growth and the impact of financial openness on economic growth is insignificant.