This thesis investigates the relationship between political instability and Gross Domestic Product (GDP) growth rate (%) in Turkey from the first quarter of 1961 to the second quarter of 2017. Proxy variables are constructed which... more
This thesis investigates the relationship between political instability and Gross Domestic Product (GDP) growth rate (%) in Turkey from the first quarter of 1961 to the second quarter of 2017. Proxy variables are constructed which quantify political instability and examine the effect on GDP growth. The relationship between dependent variable and the political instability proxies are examined with the time series regression analyses. Autoregressive Conditionally Heteroscedastic (ARCH) method is used in order to model the heteroscedasticity and volatility effect. Using ARCH (1) model, a strong link is found among many of political instability variables and GDP growth rate of Turkey. According to the empirical results, coup d'états, attempts & memorandums, Cyprus operation & US embargo, ideological & denominational events, Gulf War I & Gulf War II and 1994, 2001 & 2008 economic crisis negatively affected the growth, while elections and regime change were beneficial to the growth. On the other hand, natural disasters and high casualty terrorist bombings had no significant effect on Turkey's economic growth. Keywords: Economic Growth, Political Instability, Time Series Regression, Autoregressive Conditional Heteroscedasticity, Economy of Turkey
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This thesis investigates the relationship between political instability and Gross Domestic Product (GDP) growth rate (%) in Turkey from the first quarter of 1961 to the second quarter of 2017. Proxy variables are constructed which... more
This thesis investigates the relationship between political instability and Gross Domestic Product (GDP) growth rate (%) in Turkey from the first quarter of 1961 to the second quarter of 2017. Proxy variables are constructed which quantify political instability and examine the effect on GDP growth. The relationship between dependent variable and the political instability proxies are examined with the time series regression analyses. Autoregressive Conditionally Heteroscedastic (ARCH) method is used in order to model the heteroscedasticity and volatility effect. Using ARCH (1) model, a strong link is found among many of political instability variables and GDP growth rate of Turkey. According to the empirical results, coup d'états, attempts & memorandums, Cyprus operation & US embargo, ideological & denominational events, Gulf War I & Gulf War II and 1994, 2001 & 2008 economic crisis negatively affected the growth, while elections and regime change were beneficial to the growth. On the other hand, natural disasters and high casualty terrorist bombings had no significant effect on Turkey's economic growth. Keywords: Economic Growth, Political Instability, Time Series Regression, Autoregressive Conditional Heteroscedasticity, Economy of Turkey
