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Measuring financial stress in Turkey

Author

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  • Cevik, Emrah Ismail
  • Dibooglu, Sel
  • Kenc, Turalay

Abstract

This study examines episodes of financial stress and develops a financial stress index for the Turkish economy for the 1997–2010 period. We consider various variables that summarize different aspects of financial conditions in the economy to gauge financial stress. We construct the index and show that financial stress affects economic activity significantly. Specifically, the index is a leading indicator of economic activity in Turkey. We then discuss how information provided by the financial stress index can be used to fine tune macroeconomic policy.

Suggested Citation

  • Cevik, Emrah Ismail & Dibooglu, Sel & Kenc, Turalay, 2013. "Measuring financial stress in Turkey," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 370-383.
    • Handle: RePEc:eee:jpolmo:v:35:y:2013:i:2:p:370-383
    DOI: 10.1016/j.jpolmod.2012.06.003
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    More about this item

    Keywords

    Financial crises; Financial pressure; Economic indicators; Business cycles;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

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