Structural Adjustment and Domestic Private Saving and Investment Interaction in Turkey: A Cointegration Analysis(Türkiye'de Yapısal Reformlar ve Yurtiçi Özel Sektör Tasarruf-Yatırım Ilişkisi: Bir Eşbütünleşme Analizi)

Abstract

This study explores the direction of relationship, if there exists, between domestic private saving and investment in Turkey, with the primary focus on the impacts of structural adjustment reforms implemented in 1980. Using annual data over 1963-2002 periods and bivariate time series techniques, the study presents evidence that they are cointegrated in the pre-liberalization period, but not in its aftermath. Furthermore, the direction of the relationship between the two appears to run from savings to investment in the pre-reform period, pointing to the presence of a saving-driven investment process prior to 1980. However, the link between the two disappears after 1980 when Turkish economy became relatively open. Therefore, it seems that there does not exist an investment mechanism through which domestic saving rate enhances economic growth, at least in the Turkish case although the likely benefits of the policies that encourage saving may result from other mechanisms.

Keywords

• Domestic Saving
• Domestic Investment
• Cointegration
• Yurtiçi Tasarruflar
• Yurtiçi Yatırımlar
• Eşbütünleşme