This study investigates the empirical relationship(s) between macroeconomic instability, public and private capital accumulation and growth in Turkey over the period 1963-1999. Time series econometric techniques. such as cointegration and impulse response analysis, are used. The results of this paper suggest that the chronic and increasing macroeconomic instability of the Turkish economy has seriously affected her capital formation and growth. Furthermore, the Turkish experience indicates that chronic macroeconomic instability seems to be a serious impediment to public investment, especially to its infrastructural component, and shatters, or even reverses. the cornplementarity between public and private investment in the long run.