Asymmetric Relationship Between Consumer Loans and Money Velocity: An Application On Turkey
Journal Title: Journal of the Human and Social Science Researches - Year 2016, Vol 5, Issue 7
Abstract
The relationship between amount of money in the economy and volume of economic activity is evaluated through money velocity. Money velocity is a parameter that determines the effectiveness of monetary and fiscal policies to be implemented. In addition, loans are key indicators of financial stability for CBRT. The aim of the study is to test the effect of the consumer credits on money velocity. The so-called impact is tested via nonlinear autoregressive distributed lag model (NARDL) developed by Shin at al. (2014) for the period of 1993Q3-2016Q1. The effects of positive and negative consumer loans shocks on velocity are analyzed within the framework “Asymmetric Dynamic Multiplier Approach”. According to the results, an increase in consumer loans reduces the velocity of money at a lower rate than itself. However, a decline in consumer loans leads to a higher increase than itself on the money velocity.
Authors and Affiliations
Fatih CEYLAN| Ar. Gör, Dokuz Eylül Üniversitesi, İİBF, İktisat Bölümü fatih.ceylan@deu.edu.tr, Osman TÜZÜN| Ar. Gör, Dokuz Eylül Üniversitesi, İİBF, İktisat Bölümü osman.tuzun@deu.edu.tr, Ramazan EKİNCİ| Ar. Gör, Dokuz Eylül Üniversitesi, İİBF, İktisat Bölümü ramazan.ekinci@deu.edu.tr, Hakan KAHYAOĞLU| Doç. Dr., Dokuz Eylül Üniversitesi, İİBF, İktisat Bölümü hakan.kahyaoglu@deu.edu.tr
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