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The Effect of Hot Money Flow on Pre-Crisis Indicators of Current Accounts and Real Sectors in Turkish Economy

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  • Ömer UÄŸur Bulut
  • Sadık Rıdvan Karluk

Abstract

We investigate the impact of the hot money movements on current account and real sector leading crisis indicators under VAR (Vector Autoregressive) framework using quarterly data for a long period of 1991-2014. Our findings show that hot money movements have negative impact on current account deficit and foreign trade deficit pre-crisis indicators. We further show that they lead to instability in growth and inflation pre-crisis indicators.

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  • Ömer UÄŸur Bulut & Sadık Rıdvan Karluk, 2016. "The Effect of Hot Money Flow on Pre-Crisis Indicators of Current Accounts and Real Sectors in Turkish Economy," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 6(11), pages 1-14, November.
    • Handle: RePEc:mir:mirbus:v:6:y:2016:i:11:p:1-14
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    References listed on IDEAS

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    5. Dani Rodrik & Andres Velasco, 1999. "Short-Term Capital Flows," NBER Working Papers 7364, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gamze ŞEKEROĞLU & Melek ACAR, 2020. "The effect of hot money on stock exchange index exchange rates and interest rates: the case of Turkey," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 12(3), pages 213-227, December.

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