Abstract

In this study, the causality relationship between the political stability and gross domestic product (GDP) in Turkey with the annual data for the period 1980-2015 has been analyzed. The cointegration and Engle-Granger causality tests have been applied in the study. As the Series were cointegrated, the Error Correction Method has been used in order to carry out the causality test. According to the analysis results, the cointegration test suggests the presence of a long-term relationship between political stability and gross domestic product (GDP). As for the Error Correction Model, it reveals the presence of one-way causal relationship from political stability to GDP.

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