Vol. 10 No. 1 (2022): Business & Management Studies: An International Journal
Articles

Intertemporal credit of the Turkish lira: Comparative ARDL bound testing approaches

Ömer Faruk Özyalçın
PhD. Student, Bursa Uludağ University, Bursa, Turkey
Emin Ertürk
Prof. Dr., Bursa Uludağ University, Bursa, Turkey

Published 2022-03-26

Keywords

  • The Credit of the Turkish Lira, Selected Macroeconomic Variables, Convertibility, Structural Break, Autoregressive Distributed Lag Model, Error Correction Model
  • Türk Lirasının İtibarı, Seçilmiş Makroekonomik Değişkenler, Konvertibilite, Yapısal Kırılma, Otoregresif Dağıtılmış Gecikme Modeli, Hata Düzeltme Modeli

How to Cite

Özyalçın, Ömer F., & Ertürk, E. (2022). Intertemporal credit of the Turkish lira: Comparative ARDL bound testing approaches. Business &Amp; Management Studies: An International Journal, 10(1), 58–81. https://doi.org/10.15295/bmij.v10i1.1916

Abstract

Liberalization movements which started with the 24th January 1980 decisions, paved the way for the declaration of convertibility of the Turkish lira on 4.4.1990. However, the positive sides of the convertibility of the Turkish lira did not reflect on the Turkish economy due to ever-changing coalition governments, economic crises, earthquakes, and unusual events until the 2001 February crisis, which is a turning point for Turkey economically, politically, and socially. Therefore, the timing of the declaration of the Turkish lira’s convertibility was criticized at times. However, the Turkish lira has strengthened because the effects of the 2001 crisis dwindled at the beginning of 2002, and the political stability has turned into economic stability after November 3rd, 2002. Therefore, the declaration of the Turkish lira’s convertibility has been declared has become meaningful. This study analyses and compares the relationships between the credit and demand of Turkish lira, which is represented by the rate of change of foreign currency deposits share in total deposits at banks and the selected macroeconomic variables with Autoregressive Distributed Lag Bound Testing Approach and Error Correction Model methods by the help of two models which are set up for the periods of 1987:2Q- 2001:4Q and 2002:1Q- 2019:2Q. According to the significant results derived from the empirical studies; the frequency of experiencing crises selected macroeconomic variables which affect the rate of change of foreign currency deposits share in total deposits at banks in Turkey and the sign of these effects show the difference in the short run, in the long run, and between the periods.

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