The Relationship between Economic Growth, Remittances, Public Expenditures, and Economic Globalization in Türkiye
Chapter from the book:
Ertürkmen,
G.
(ed.)
2024.
Current Applications of Macroeconomics .
Synopsis
This research explored the relationships between economic growth, remittances, public expenditures, and types of economic globalization (trade globalization and financial globalization) for Türkiye over the period between 1974 and 2021. For this purpose, the relationship between the aforementioned variables was examined through the Fourier VAR model developed by Enders and Jones (2016). The impulse-response functions, variance decomposition results, and Granger causality test results were presented and discussed. According to the findings, remittances, public expenditures, and financial globalization have a negative effect on economic growth. However, it was found that per capita income did not give a statistically significant response to a shock in trade globalization. Besides, the variance decomposition results showed that the explanatory power of other variables (except per capita income) to explain the forecast error variance in per capita GDP remained quite low over the 5-years. Finally, it was concluded that there was no causal relationship between remittances and economic growth. Policymakers may consider the empirical findings of this study and use workers' remittances in a way that contributes to economic growth in the future.