9 Human Development and Economic Growth in Turkey and China: An Empirical Analysis of the Causal Relationship

Asst. Prof. Hakkı Kutay Bolkol / Asst. Prof. Ece H. Güleryüz / Süleyman Iminov

Human capital development has been a major global issue for many years in both developed and developing countries. The relationship between human capital development and economic growth has always interested policy makers who want to realize prudent macroeconomic policies. The purpose of this study is to investigate the causal relationship between the human development index (HDI) and gross domestic product (GDP) per capita in Turkey and China. It is important to notice that the differences in population and GDP between Turkey and China are enormous. On the other hand, the indicator, GDP per capita, resolves the macroeconomic comparison challenges between the two countries. China has become one of the world’s leading economies since it amended the closed-economy to a state directed open market economy. Whether human capital development has an important influence on economic growth in China and Turkey, or it is economic growth causing more human capital accumulation as a nation becomes wealthier remains as an active research question to be answered.