Relationship between economic growth and external debt: An econometric analysis for Turkey

States need a specific resource to meet their various macroeconomic goals. The inadequate availability of these resources is driving the state into debts. In situations where it is difficult for states to borrow from their internal resources, borrowing is being sought from external sources. Foreign borrowing can have various effects on the economy. The purpose of this study is to examine whether there is a relationship between economic growth and external debt for Turkey. In this paper, annual data were used and data is from 1990 to 2017. The study is analyzed by the VAR model and the Granger Causality test. According to the impulse - response functions obtained in the VAR model, in examined period the debt reacts negatively in the second period in response to a shock to growth. According to the Granger Causality test, it is seen that the growth is a causal causality to debt