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Search for Co-Integratıon Between Money, Prıces and Income: Low Frequency Evıdence From the Turkısh Economy

Author

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  • Cem Saatçioğlu
  • Levent Korap

Abstract

In this paper, we aim to test the empirical validity of the QTM relationship for the Turkish economy. Using some contemporaneous time series estimation techniques, our estimation results reveal that stationarity characteristics of the velocities of currency in circulation and the broad money aggregate in the economy cannot be rejected through a quantity theoretical co-integrating long-term variable space. We find that there exists an about one-to-one proportionality between money and prices and money and real income, and that exogeneity of money cannot be rejected for the currency in circulation in the economy. But, the exception here comes from the broad monetary aggregate used in the QTM equation such that money seems to be endogenous as for the long-term variable space. Key words: Money, Prices, Income, Quantity theory of money, Co-integration, Longspan data, Turkish economy.JEL: C32, E51, E52, E61.

Suggested Citation

  • Cem Saatçioğlu & Levent Korap, 2009. "Search for Co-Integratıon Between Money, Prıces and Income: Low Frequency Evıdence From the Turkısh Economy," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 56(1), pages 55-72.
    • Handle: RePEc:voj:journl:v:56:y:2009:i:1:p:55-72:id:207
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    More about this item

    Keywords

    Money; Proces; Income; Quantity Theory of Money; Co-integration; Longspan Data; Turkish Economy;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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