CPI, MONEY SUPPLY AND EXCHANGE RATE DYNAMICS IN TURKEY: A VECM APPROACH

Onur SUNAL

Article Details

CPI, MONEY SUPPLY AND EXCHANGE RATE DYNAMICS IN TURKEY: A VECM APPROACH

Authors:

Onur SUNAL

Publisher:

PressAcademia

Main Topics:

Sociology and anthropology

Journal:

Journal of Economics Finance and Accounting 2018 Vol.5 Issue 3, pp.249-260

Document Type:

Article

Publication Date:

9/2018

Document Language:

English

Document ID (Org No.):

2000738662

Frequency:

Quarterly

eISSN:

2148-6697

Abstract:

 


Purpose- The
aim of this study is to outline the relationship between The Consumer Price
Index (CPI), Money Supply (M3) and The Exchange Rates (EXC) in Turkey. 


Methodology- The
data were gathered from The Turkish Statistical Instittute and The Central Bank
which covers the monthly period between 2005/1 and 2017/12 and were taken on
their own levels where an error correction model was utilized to reveal both
the long and short run relationships.


Findings- The
results revealed that 100 billion TL rise in M3 is accompanied by 19 points
increase in the CPI and 1TL depreciation of local currency (appreciation of $)
leads to 82.9 points upswing in CPI.


Conclusion- The Cointegrating equation revealed
that there was a significant long-run relationship between CPI, Money Supply
and Exchange Rates. Moreover changes in M3 and
EXC together cause changes in CPI at .10 significance level. Money Supply
endogeneity was also observed at the 10 level.


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Article Details

CPI, MONEY SUPPLY AND EXCHANGE RATE DYNAMICS IN TURKEY: A VECM APPROACH

Authors: Onur SUNAL

Publisher: PressAcademia

Main Topics: Sociology and anthropology

Journal: Journal of Economics Finance and Accounting 2018 Vol.5 Issue 3, pp.249-260

Document Type: Article

Publication Date: 9/2018

Document Language: English

Document ID (Org No.): 2000738662

Frequency: Quarterly

eISSN: 2148-6697

Issues

Authors:

Onur SUNAL

Publisher:

PressAcademia

Main Topics:

Sociology and anthropology

Journal:

Journal of Economics Finance and Accounting 2018 Vol.5 Issue 3, pp.249-260

Document Type:

Article

Publication Date:

9/2018

Document Language:

English

Document ID (Org No.):

2000738662

Frequency:

Quarterly

eISSN:

2148-6697