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Access to Credit and Aggregate Consumption Function

Year 2015, Volume: 15 Issue: 2, 239 - 252, 01.05.2015

Abstract

This paper examines the aggregate consumption function for Turkey considering changes in credit regimes. The findings suggest that changes in access to domestic credit substantially affect both short- and long-run dynamics between aggregate consumption and macroeconomic variables. They show that the financial variables have a relatively strong effect on aggregate consumption, and the effect of income on aggregate consumption decreases in the recent period [2003-2013] which is characterized by the loose-credit regime. Furthermore, the results suggest that fluctuations in the aggregate consumption are primarily driven by the financial shocks rather than the income shocks during this period. Overall, with greater access to domestic credit, in the recent decade, the link between aggregate consumption and financial variables strengthens, and thereby the excess sensitivity of aggregate consumption to income declines in Turkey. This implies that policy makers should mainly focus on the financial variables to curb the rapid domestic consumption growth

References

  • Abeysinghe, T. ve Choy, K. M. (2004) “The Aggre- gate Consumption Puzzle in Singapore” Journal of Asian Economics, 15(3):563-578.
  • Ando, A. ve Modigliani, F. (1963) “The “Life Cycle” Hypothesis of Saving: Aggregate Implications and Tests” The American Economic Review, 53(1):55-84.
  • Arslan, Y. ve Taşkın, T. (2014) “International Evi- dence on the Interaction between Cross-Border Capital Flows and Domestic Credit Growth” İktisat İşletme ve Finans, 29(341):37-56.
  • Atoyan, R., Manning J.F. ve Rahman, J. (2013) “Re- balancing: Evidence from Current Account Adjustment in Europe” IMF Working Paper, No: 13/74.
  • Aydede, Y. (2008) “Aggregate Consumption Function and Public Social Security: The First Time-Series Study for a Developing Country Turkey” Applied Economics, 40(14):1807-1826.
  • Bacchetta, P. ve Gerlach, S. (1997) “Consumption and Credit Constraints: International Evidence” Journal of Monetary Economics, 40(2):207-238, http://dx.doi. org/10.1016/S0304-3932(97)00042-1.
  • Blinder, A. S., ve Deaton, A. (1985) “The Time Seri- es Consumption Function Revisited” Brookings Papers on Economic Activity, (2):465–511.
  • Campbell, J. Y. ve Mankiw, N. G. (1989) “Consump- tion, Income and Interest Rates: Reinterpreting the Time Series Evidences” O. J. Blanchard ve S. Fischer, (Eds.) NBER Macroeconomics Annual, pp. 185–216, MIT Press, Cambridge, MA.
  • Craigwell, R. C. ve Rock, L. L. (1995) “An Aggrega- te Consumption Function for Canada: a Cointegration Approach” Applied Economics, 27(2):239-249.
  • Çolak, Ö.F., Öztürkler, H., ve Tokatlıoğlu, İ. (2008) “Türkiye’de Tüketim Fonksiyonunun Dilim Regres- yon Yöntemi ile Tahmini” İktisat İşletme ve Finans, 23(268):62-93.
  • Duesenberry, J.S. (1948) “Income Consumption Re- lation and their Implications” In L. Metzler (Hrsg.): In- come, Employment and Public Policy, W.W Nproton, New York, p.54-81.
  • Engle, R. F. ve Granger, C. W. J. (1987) “Co- integration and Error Correction: Representation, Esti- mation and Testing” Econometrica, 55(2):1251–1276.
  • Ekinci, M.F., Erdem, F.P. ve Kılınç, Z. (2014) “Credit Growth, Current Account and Financial Depth” Working Paper, TCMB, No: 14/21.
  • Everaert, G. ve Pozzi, L. (2014) “The Predictability of Aggregate Consumption Growth in OECD Countri- es: A Panel Data Analysis” J. Appl. Econ., 29:431–453. doi: 10.1002/jae.2338.
  • Flavin, M. (1981) “The Adjustment of Consumption to Changing Expectations about Future Income” J. Polit. Econ, 89:974–1009.
  • Fisher, I. (1930). The Theory of Interest, MacMillan, New York.
  • Friedman, M. (1957). A Theory of the Consumption Function, Princeton University Press, Princeton.
  • Gregory, A. W. ve Hansen, B. E. (1996) “Residu- al-Based Tests for Cointegration in Models with Regi- me Shifts” Journal of Econometrics, 70(1):99-126. doi: 10.1016/0304-4076(69)41685-7
  • Hamilton, J. D. (1994) Time Series Analysis. Prince- ton: Princeton University Press.
  • Hall, R. E. (1978) “Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evi- dence” The Journal of Political Economy, 86 (6):971-987.
  • IMF (December, 2012) Turkey: Selected Issiues. IMF Country Report, No: 12/339.
  • Kara, H., Küçük, H., Tiryaki, S.T., ve Yüksel C. (2014) “In Search of A Reasonable Credit Growth Rate for Turkey” Central Bank Review, 14:1-14.
  • Kumar, S. (2009) “A Re-examination of Private Con- sumption in Fiji” Pacific Economic Bulletin, 24(2): 70-81.
  • Ludvigson, S. (1999) “Consumption and Credit: A Model of Time-Varying Liquidity Constraints” Review of Economics and Statistics, 81:434 – 447.
  • Lütkepohl, H. ve Kratzig, M. (2004) Applied Time Series Econometrics, Cambridge: Cambridge University Press.
  • Modigliani, F. ve Brumberg, R. (1954) “Utility Analysis and Consumption Function: An Interpretion of Cross-Section Data” Kenneth K. Kurihara (eds.) Post Key- nesian economics, Rutgers Universiy Press.
  • OECD  (2014).  OECD Economic Surveys: Turkey 2014, OECD Publishing. DOI: 10.1787/eco_surveys- tur-2014-en
  • Okubo, M. (2002) “Long-Run Relationship between Consumption and Income in Japan: Tests of the Deter- ministic Cointegration Restriction” Journal of the Japanese and International Economies, 16:253-278.
  • Pehlivan, G.G. ve Utkulu, U. (2007) “Türkiye’nin Tüketim Fonksiyonu: Parçalı Hata Düzeltme Modeli Bulguları” Akdeniz İ.İ.B.F. Dergisi, 14: 39-65.
  • Ulengin, B. ve Yentürk, N. (2001) “Impacts of Capi- tal Inflows on Aggregate Spending Categories: the Case of Turkey” Applied Economics, 33(10):1321-1328.
  • Yildirim, Z. (2015) “Relationships among labour productivity, real wages and inflation in Turkey”, Econo- mic Research-Ekonomska Istraživanja, 28:1, 85-103.

Krediye Erişim ve Toplam Tüketim Fonksiyonu

Year 2015, Volume: 15 Issue: 2, 239 - 252, 01.05.2015

Abstract

Bu çalışma Türkiye için toplam tüketim fonksiyonunu kredi rejimindeki değişimleri dikkate alarak incelemektedir. Krediye erişim koşullarındaki değişimlerin hem toplam tüketim fonksiyonunun parametrelerini hem de tüketim ve makroekonomik değişkenler arasındaki kısa dönem dinamikleri önemli ölçüde etkilediği sonucuna ulaşılmıştır. Elde edilen bulgular, gevşek kredi rejiminin hakim olduğu son dönemlerde [2003-2013], finansal değişkenlerin toplam tüketim üzerinde görece daha büyük etkiye sahip olduğunu ve gelirin toplam tüketim üzerindeki etkisinin azaldığını göstermektedir. Ayrıca, varyans ayrıştırması analizi sonuçları söz konusu dönemde tüketimdeki dalgalanmaların ana kaynağının gelir şoklarından ziyade finansal şoklar olduğunu ortaya koymaktadır. Özetle, ulaşılan bulgular krediye erişimin artmasıyla son dönemlerde tüketimin gelire aşırı duyarlılığının azaldığını, buna karşın tüketim ve finansal değişkenler arasındaki bağın güçlendiğini göstermektedir. Bu bulgular politika yapıcıların hızlı yurtiçi tüketim büyümesini baskılamak için finansal değişkenlere odaklanmaları gerektiğini ima etmektedir

References

  • Abeysinghe, T. ve Choy, K. M. (2004) “The Aggre- gate Consumption Puzzle in Singapore” Journal of Asian Economics, 15(3):563-578.
  • Ando, A. ve Modigliani, F. (1963) “The “Life Cycle” Hypothesis of Saving: Aggregate Implications and Tests” The American Economic Review, 53(1):55-84.
  • Arslan, Y. ve Taşkın, T. (2014) “International Evi- dence on the Interaction between Cross-Border Capital Flows and Domestic Credit Growth” İktisat İşletme ve Finans, 29(341):37-56.
  • Atoyan, R., Manning J.F. ve Rahman, J. (2013) “Re- balancing: Evidence from Current Account Adjustment in Europe” IMF Working Paper, No: 13/74.
  • Aydede, Y. (2008) “Aggregate Consumption Function and Public Social Security: The First Time-Series Study for a Developing Country Turkey” Applied Economics, 40(14):1807-1826.
  • Bacchetta, P. ve Gerlach, S. (1997) “Consumption and Credit Constraints: International Evidence” Journal of Monetary Economics, 40(2):207-238, http://dx.doi. org/10.1016/S0304-3932(97)00042-1.
  • Blinder, A. S., ve Deaton, A. (1985) “The Time Seri- es Consumption Function Revisited” Brookings Papers on Economic Activity, (2):465–511.
  • Campbell, J. Y. ve Mankiw, N. G. (1989) “Consump- tion, Income and Interest Rates: Reinterpreting the Time Series Evidences” O. J. Blanchard ve S. Fischer, (Eds.) NBER Macroeconomics Annual, pp. 185–216, MIT Press, Cambridge, MA.
  • Craigwell, R. C. ve Rock, L. L. (1995) “An Aggrega- te Consumption Function for Canada: a Cointegration Approach” Applied Economics, 27(2):239-249.
  • Çolak, Ö.F., Öztürkler, H., ve Tokatlıoğlu, İ. (2008) “Türkiye’de Tüketim Fonksiyonunun Dilim Regres- yon Yöntemi ile Tahmini” İktisat İşletme ve Finans, 23(268):62-93.
  • Duesenberry, J.S. (1948) “Income Consumption Re- lation and their Implications” In L. Metzler (Hrsg.): In- come, Employment and Public Policy, W.W Nproton, New York, p.54-81.
  • Engle, R. F. ve Granger, C. W. J. (1987) “Co- integration and Error Correction: Representation, Esti- mation and Testing” Econometrica, 55(2):1251–1276.
  • Ekinci, M.F., Erdem, F.P. ve Kılınç, Z. (2014) “Credit Growth, Current Account and Financial Depth” Working Paper, TCMB, No: 14/21.
  • Everaert, G. ve Pozzi, L. (2014) “The Predictability of Aggregate Consumption Growth in OECD Countri- es: A Panel Data Analysis” J. Appl. Econ., 29:431–453. doi: 10.1002/jae.2338.
  • Flavin, M. (1981) “The Adjustment of Consumption to Changing Expectations about Future Income” J. Polit. Econ, 89:974–1009.
  • Fisher, I. (1930). The Theory of Interest, MacMillan, New York.
  • Friedman, M. (1957). A Theory of the Consumption Function, Princeton University Press, Princeton.
  • Gregory, A. W. ve Hansen, B. E. (1996) “Residu- al-Based Tests for Cointegration in Models with Regi- me Shifts” Journal of Econometrics, 70(1):99-126. doi: 10.1016/0304-4076(69)41685-7
  • Hamilton, J. D. (1994) Time Series Analysis. Prince- ton: Princeton University Press.
  • Hall, R. E. (1978) “Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evi- dence” The Journal of Political Economy, 86 (6):971-987.
  • IMF (December, 2012) Turkey: Selected Issiues. IMF Country Report, No: 12/339.
  • Kara, H., Küçük, H., Tiryaki, S.T., ve Yüksel C. (2014) “In Search of A Reasonable Credit Growth Rate for Turkey” Central Bank Review, 14:1-14.
  • Kumar, S. (2009) “A Re-examination of Private Con- sumption in Fiji” Pacific Economic Bulletin, 24(2): 70-81.
  • Ludvigson, S. (1999) “Consumption and Credit: A Model of Time-Varying Liquidity Constraints” Review of Economics and Statistics, 81:434 – 447.
  • Lütkepohl, H. ve Kratzig, M. (2004) Applied Time Series Econometrics, Cambridge: Cambridge University Press.
  • Modigliani, F. ve Brumberg, R. (1954) “Utility Analysis and Consumption Function: An Interpretion of Cross-Section Data” Kenneth K. Kurihara (eds.) Post Key- nesian economics, Rutgers Universiy Press.
  • OECD  (2014).  OECD Economic Surveys: Turkey 2014, OECD Publishing. DOI: 10.1787/eco_surveys- tur-2014-en
  • Okubo, M. (2002) “Long-Run Relationship between Consumption and Income in Japan: Tests of the Deter- ministic Cointegration Restriction” Journal of the Japanese and International Economies, 16:253-278.
  • Pehlivan, G.G. ve Utkulu, U. (2007) “Türkiye’nin Tüketim Fonksiyonu: Parçalı Hata Düzeltme Modeli Bulguları” Akdeniz İ.İ.B.F. Dergisi, 14: 39-65.
  • Ulengin, B. ve Yentürk, N. (2001) “Impacts of Capi- tal Inflows on Aggregate Spending Categories: the Case of Turkey” Applied Economics, 33(10):1321-1328.
  • Yildirim, Z. (2015) “Relationships among labour productivity, real wages and inflation in Turkey”, Econo- mic Research-Ekonomska Istraživanja, 28:1, 85-103.
There are 31 citations in total.

Details

Other ID JA46TR26SC
Journal Section Research Article
Authors

Zekeriya Yıldırım This is me

Publication Date May 1, 2015
Published in Issue Year 2015 Volume: 15 Issue: 2

Cite

APA Yıldırım, Z. (2015). Access to Credit and Aggregate Consumption Function. Ege Academic Review, 15(2), 239-252.
AMA Yıldırım Z. Access to Credit and Aggregate Consumption Function. ear. May 2015;15(2):239-252.
Chicago Yıldırım, Zekeriya. “Access to Credit and Aggregate Consumption Function”. Ege Academic Review 15, no. 2 (May 2015): 239-52.
EndNote Yıldırım Z (May 1, 2015) Access to Credit and Aggregate Consumption Function. Ege Academic Review 15 2 239–252.
IEEE Z. Yıldırım, “Access to Credit and Aggregate Consumption Function”, ear, vol. 15, no. 2, pp. 239–252, 2015.
ISNAD Yıldırım, Zekeriya. “Access to Credit and Aggregate Consumption Function”. Ege Academic Review 15/2 (May 2015), 239-252.
JAMA Yıldırım Z. Access to Credit and Aggregate Consumption Function. ear. 2015;15:239–252.
MLA Yıldırım, Zekeriya. “Access to Credit and Aggregate Consumption Function”. Ege Academic Review, vol. 15, no. 2, 2015, pp. 239-52.
Vancouver Yıldırım Z. Access to Credit and Aggregate Consumption Function. ear. 2015;15(2):239-52.