Examination of money supply endogeneity in Turkey: Evidence from asymmetric causality test

In this study, we examine the money supply endogeneity in Turkish economy for the post crises period, between 2009.10 and 2016.12 by employing asymmetric causality test. Our results reveal that a positive credit shock will cause a positive shock in the money supply. That is, an increase in banking s...

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Bibliographic Details
Published in:Cogent economics & finance 2018-01, Vol.6 (1), p.1-18
Main Authors: Dedeoglu, Dincer, Ogut, Kaan
Format: Article
Language:English
Subjects:
asymmetry
Bank loans
Causality
Economic models
granger causality
Money supply
Money supply endogeneity
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Summary:In this study, we examine the money supply endogeneity in Turkish economy for the post crises period, between 2009.10 and 2016.12 by employing asymmetric causality test. Our results reveal that a positive credit shock will cause a positive shock in the money supply. That is, an increase in banking sector credit volume will cause an increase in money supply. However, such a causal impact for negative shocks is not found. Our findings show that the causality runs from bank loans to money supply for the positive components so credit cuts may not initiate a fall in money supply.
ISSN:2332-2039
2332-2039
DOI:10.1080/23322039.2018.1518956