Causality Effects of Capital Accumulation and Employment on Turkey’s Economic Growth: Findings from the Toda-Yamamoto Approach

A time-dependent change in the amount of goods and services produced in an economy refers to economic growth. Economic growth is considered an important factor in increasing the welfare of a society and in determining the level of development of countries. Therefore, all countries in the world endeavour to increase their economic growth performance. By increasing the economic growth performance of countries, opportunities to compete with other economies increase because of the increase in production activities in the economy. Therefore, economic growth is considered to be one of the most important issues in the economy in terms of its causes and consequences. This framework aims to test the effects of capital accumulation, employment level, and technological progress factors on economic growth in Turkey between 1990-2021. For this purpose, the relationships between the variables were analysed using the Toda-Yamamoto causality test. The analyses revealed that capital accumulation, employment level, and technological progress have a statistically significant relationship with economic growth. This result is consistent with the hypotheses regarding the determinant role of capital, labour, and technology factors in economic growth, which are put forward in Solow's neoclassical growth model and endogenous growth theories.