Money, Income, and Causality: An Examination for the Turkish Economy
Year: 2013
Type: article
Abstract: This paper examines the direction of causality between money and income for the Turkish economy using quarterly data over the period of 1987 to 2011. A vector autoregression model consisting of the real gross domestic product, the broad money supply, the three months deposit rate as short-term interest rate, and the consumer price index is constructed to implement causality tests. Also, a leveraged bootstrapped simulation technique is used when conducting causality tests in order to make the results more robust. The empirical results suggest a bidirectional causation between the two variables and that monetary aggregates may provide relevant information in the implementation of monetary policy.
Author: Şeref Bozoklu
Institution: Istanbul University
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W85117353