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Long-run relations between money, prices and output: the case of Turkey

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  • Levent, Korap

Abstract

In this paper, the long-run relationships between monetary aggregates, prices and real output level have been examined in a quantity theory of money perspective for the Turkish economy. Using some contemporaneous econometric techniques, our findings exhibit that stationary characteristics of the velocities of narrowly and broadly defined monetary aggregates cannot be rejected. However, monetary aggregates seem to have an endogeneity for the long-run evolution of prices and real income. Furthermore, some parameter instabilities and structural breaks have been attributed to the estimated model especially for the 1994 and 2001 economic crisis periods in the Turkish economy. We have concluded that given the endogenous characteristics of the monetary variables, monetary authority follows an accommodative monetary policy inside the period.

Suggested Citation

  • Levent, Korap, 2008. "Long-run relations between money, prices and output: the case of Turkey," MPRA Paper 20265, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20265
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    Cited by:

    1. Saungweme Talknice & Odhiambo Nicholas M., 2021. "Public debt and inflation dynamics: Empirical evidence from Zimbabwe," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 7(2), pages 14-30, December.
    2. Saungweme Talknice & Odhiambo Nicholas M., 2021. "Public debt and inflation dynamics: Empirical evidence from Zimbabwe," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 7(2), pages 14-30, December.
    3. T. Saungweme & N.M. Odhiambo, 2021. "Public Debt and Inflation Dynamics: Empirical Evidence from Zimbabwe," Working Papers AESRI-2021-07, African Economic and Social Research Institute (AESRI), revised Oct 2021.
    4. Saungweme Talknice & Odhiambo Nicholas M., 2021. "Public debt and inflation dynamics: Empirical evidence from Zimbabwe," Croatian Review of Economic, Business and Social Statistics, Sciendo, vol. 7(2), pages 14-30, December.
    5. Srinivasan Palamalai & Kalaivani Mariappan & Christopher Devakumar, 2014. "On the Temporal Causal Relationship Between Macroeconomic Variables," SAGE Open, , vol. 4(1), pages 21582440145, February.
    6. Talknice Saungweme & Nicholas M. Odhiambo, "undated". "Public Debt And Inflation Dynamics: Empirical Evidence From Zimbabwe," Working Papers AESRI05, African Economic and Social Research Institute (AESRI).

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    More about this item

    Keywords

    Quantity Theory of Money ; Co-integration ; 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
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money

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