Time Series Analysis of the Relationship Between Tax Revenues and Economic Growth in Turkey
Chapter from the book: Çemrek, F. (ed.) 2026. Time Series Analysis: Current Methods and Applications I.

Aytaç Pekmezci
Muğla Sıtkı Koçman University

Synopsis

Tax revenues collected by a state are one of the most important public finance instruments. The tax revenues obtained in this way are one of the most strategic intervention tools for securing the financial resources necessary for the state to maintain its existence. However, when examining the applied studies in the literature addressing the impact of tax revenues on economic growth, there is no complete consensus. Most of these studies state that tax revenues have a positive effect on economic growth, while the rest state that they have a negative effect or no effect on each other. Current theoretical approaches indicate that tax revenue policies have multidimensional and profound effects on economic growth in the long term. In line with these statements, this study analyzes the relationship between the dependent variable of Economic Growth and the independent variable of Tax Revenues at a 5% significance level using time series data for Turkey for the period 1972-2024. After determining the model, unit root tests (ADF and PP), which are commonly used in the literature to determine the stationarity levels of the variables, were used in the analysis, and it was determined that the variables were stationary at the same level. The Johansen cointegration test, which tests for the existence of a long-term relationship between the variables, did not find a statistically significant relationship. In the final stage, the UVAR Granger causality test, which examines the existence of a short term relationship between variables, found a short-term relationship from economic growth to tax revenues. This result proves that economic growth has a decisive effect on tax revenues. However, no short-term relationship was found from tax revenues to economic growth, proving that tax revenues do not have a decisive effect on economic growth.

How to cite this book

Pekmezci, A. (2026). Time Series Analysis of the Relationship Between Tax Revenues and Economic Growth in Turkey. In: Çemrek, F. (ed.), Time Series Analysis: Current Methods and Applications I. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub1250.c5081

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Published

March 18, 2026

DOI