DOI: 10.36347/sjebm.2015.v02i05.018

Pages: 566-572

The main aim of this study is to reveal the causality relationship between education expenditures index with finance sector development index and economic growth in North Cyprus. After producing indexes, Vector Error Correction Model (VECM), Granger Causality Analysis, Impulse Responses and Variance Decompositions are run to check the short and long term relationships. Findings show us that there are both long and short term bidirectional relationships amongst education expenditure index and financial development index with the Gross Domestic Product (GDP) growth in North Cyprus.