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THE FORCED EQUILIBRIUM: GROWTH, INFLATION, AND INVESTMENT: EMPIRICAL EVIDENCE FROM TURKIYE

Year 2024, , 56 - 74, 01.07.2024
https://doi.org/10.61127/idusos.1474763

Abstract

This study embarks on a comprehensive exploration of the intricate dynamics between economic growth, inflation, and investment within the unique economic landscape of Turkiye. Spanning from the years of 1998 to 2022, the analysis meticulously delves into a repository of data sourced from reliable datasets. Leveraging a sophisticated analytical toolkit, including Narayan and Popp (2010)'s Unit Root Test, Lee and Strazicich's Unit Root Test, as well as VAR Model and VAR Granger Causality Test methodologies, the study aptly accommodates the multifaceted nature of structural breaks inherent within the Turkish economy. The culmination of this rigorous analysis unveils compelling insights into the complex interplay among these pivotal economic variables. Notably, the findings elucidate the presence of distinct unidirectional causality relationships, highlighting the profound impact of both investment and economic growth on shaping the trajectory of inflation within Turkiye. This revelation serves to underscore the pressing imperative for Turkiye to meticulously navigate a delicate equilibrium between its ambitious developmental aspirations and the pressing need to effectively combat inflationary pressures. Situated within this intricate balance lies a formidable challenge for Turkiye, necessitating the formulation of astute policy interventions aimed at reconciling this inherent paradox. It becomes abundantly clear that any policy measures devised must strike a delicate balance, effectively addressing the dual objectives of fostering sustainable economic growth while simultaneously mitigating the adverse effects of inflation. Moreover, it is imperative for Turkiye to steadfastly adhere to the implementation of these policies, ensuring their efficacy in navigating the complex economic landscape. In essence, this study serves as a clarion call for Turkiye to adopt a holistic approach toward economic policymaking, one that not only acknowledges the multifaceted nature of economic interdependencies but also embraces the imperative of striking a delicate balance between competing objectives. By charting a prudent course forward, Turkiye can effectively surmount the challenges posed by this intricate economic landscape, paving the way for sustained economic prosperity and resilience in the years to come.

References

  • Bağcı, E., and Ergüven, E. (2016). Relations Between Interest Rate, Inflation, Growth, and Investment in Turkey, 2002-2015. ISOR Journal of Economics and Finance, 7(5), 43-49.
  • Bakari, S. (2018). The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria. Bulletin of Economic Theory and Analysis, 3(1), 35-51. https://doi.org/10.25229/beta.337367
  • Barro, R. J. (2013). Education and Economic Growth. Annals of Economics and Finance, 14(2), 301-328.
  • Bjelić, J., Erić, O., and Kovačević, S. (2021). Macroeconomic Determinants of Investment in the Balkan Countries . (2021). Acta Economica, 19(35), 19-33. https://doi.org/10.7251/ACE2135019B
  • Denano, T., and Sibera, S. (2022). The Causal Nexus between Economic Growth, Investment and Saving using Vector Error Correction Model in Ethiopia. Estudios de Economía Aplicada, 40(3), 25.
  • Ertek, T. (2000). Ekonometriye Giriş. İstanbul: Beta Yayıncılık, 2. Baskı.
  • Granger, C. W. J. (1969). Investigating Causal Relations by Econometric Models and Cross-spectral Methods. Econometrica, 37(3), 424-438.
  • Jangili, R. (2011). Causal Relationship Between Saving, Investment and Economic Growth for India–What Does the Relation Imply?.
  • Hordofa, D. F. (2023). Impacts of External Factors on Ethiopia's Economic Growth: Insights on Foreign Direct Investment, Remittances, Exchange Rates, and Imports. Heliyon, 28;9(12):e22847. doi: 10.1016/j.heliyon.2023.e22847.
  • Kartikasari, D. (2017). The Effect of Export, Import and Investment to Economic Growth of Riau Islands Indonesia. International Journal of Economics and Financial Issues, 7(4), 663-667.
  • Kaygısız, A. D., Dilek, G. Ö. Z. E., and Kösekahyaoğlu, L. (2016). Türkiye’de Tasarruf, Yatırım, Cari Açık ve Büyüme: 1980-2014 Dönemi Üzerine Bir Nedensellik İlişkisi Analizi. Çankırı Karatekin Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 7(1), 273-300.
  • Khan, S., Shenhadji, A. (2003). Financial Development and Economic Growth: A Review and New Evidence. Journal of African Economies, 12, AERC Supplement 2: ii89-ii110.
  • Kirmanoğlu, H. (2001). Is There Inflation-Growth Tradeoff in the Turkish Economy?. Universitäts-und Landesbibliothek Sachsen-Anhalt.
  • Kormendi, R. C., and Meguire, P. G. (1985). Macroeconomic Determinants of Growth: Cross-country Evidence. Journal of Monetary Economics, 16(2), 141-163.
  • Lee, J., and Strazicich, M. C. (2003). Minimum Lagrange multiplier unit root test with two structural breaks. Review of Economics and Statistics, 85(4), 1082-1089.
  • Lee, J., Strazicich, and M. (2004). Minimum LM Unit Root Test. Working Paper, Department of Economics, Appalachian State University.
  • Schmidt, P., and Phillips, P.C.B. (1992). LM Tests for a Unit Root in the Presence of Deterministic Trends. Oxford Bulletin of Economics and Statistics, 54, 257-287.
  • Sims, C. A. (1980). Macroeconomics and Reality. Econometrica: Journal of the Econometric Society, 1-48. Strazicich, M. C., Lee, J., and Day, E. (2004). Are Incomes Converging Among OECD Countries? Time Series Evidence with two structural breaks. Journal of Macroeconomics, 26(1), 131-145.
  • Lumsdaine, R. L., and Papell, D. H. (1997). Multiple trend breaks and the unit-root hypothesis. Review of Economics and Statistics, 79(2), 212-218.
  • Narayan, P. K., and Popp, S. (2010). A New Unit Root Test with Two Structural Breaks in Level and Slope at Unknown Time. Journal of Applied Statistics, 37(9), 1425-1438.
  • Narayan, P. K., and Popp, S. (2013). Size and power properties of structural break unit root tests. Applied Economics, 45(6), 721-728.
  • Tarı, R. (2010). Ekonometri (6th ed.). 2010: UmutTepe.
  • Valadkhani, A. (2003). Using Input-output Analysis to Identify Australia's High Employment Generating Industries. Australian Bulletin of Labour, 29(3), 199-217.

ZORLU DENGE: BÜYÜME, ENFLASYON VE YATIRIM: TÜRKİYE'DEN AMPİRİK KANITLAR

Year 2024, , 56 - 74, 01.07.2024
https://doi.org/10.61127/idusos.1474763

Abstract

Bu çalışma, Türkiye'nin kendine özgü ekonomik ortamında ekonomik büyüme, enflasyon ve yatırım arasındaki karmaşık dinamikleri kapsamlı bir şekilde incelemektedir. 1998-2022 yıllarını kapsayan analiz, güvenilir veri setlerinden elde edilen bir veri havuzunu titizlikle incelemektedir. Narayan ve Popp'un (2010) Birim Kök Testi, Lee ve Strazicich'in Birim Kök Testi ile VAR Modeli ve VAR Granger Nedensellik Testi metodolojilerini içeren sofistike bir analitik araç setinden yararlanan çalışma, Türkiye ekonomisinin doğasında bulunan yapısal kırılmaların çok yönlü doğasını uygun bir şekilde barındırmaktadır. Bu titiz analizin sonucunda, bu önemli ekonomik değişkenler arasındaki karmaşık etkileşime dair ilgi çekici bilgiler ortaya çıkmaktadır. Özellikle bulgular, farklı tek yönlü nedensellik ilişkilerinin varlığını ortaya koymakta ve hem yatırımın hem de ekonomik büyümenin Türkiye'deki enflasyonun yörüngesini şekillendirmedeki derin etkisini vurgulamaktadır. Bu bulgu, Türkiye'nin iddialı kalkınma hedefleri ile enflasyonist baskılarla etkin bir şekilde mücadele etme ihtiyacı arasındaki hassas dengeyi titizlikle gözetmesi gerektiğinin altını çizmektedir. Bu karmaşık dengenin içinde Türkiye için zorlu bir görev yatmakta ve bu içsel paradoksu uzlaştırmayı amaçlayan zekice politika müdahalelerinin formüle edilmesini gerektirmektedir. Tasarlanan her türlü politika tedbirinin hassas bir denge kurması, sürdürülebilir ekonomik büyümeyi teşvik ederken aynı zamanda enflasyonun olumsuz etkilerini hafifletmek gibi ikili hedefleri etkin bir şekilde ele alması gerektiği son derece açıktır. Dahası, Türkiye'nin bu politikaların uygulanmasına kararlılıkla bağlı kalması ve karmaşık ekonomik ortamda etkin bir şekilde yol almasını sağlaması zorunludur. Özünde bu çalışma, Türkiye'nin ekonomi politikaları oluştururken bütüncül bir yaklaşım benimsemesi için bir çağrı niteliği taşımaktadır; bu yaklaşım sadece ekonomik karşılıklı bağımlılıkların çok yönlü doğasını kabul etmekle kalmayıp aynı zamanda birbiriyle rekabet eden hedefler arasında hassas bir denge kurma zorunluluğunu da benimsemektedir. İleriye dönük ihtiyatlı bir rota çizerek Türkiye, bu karmaşık ekonomik manzaranın ortaya çıkardığı zorlukların üstesinden etkili bir şekilde gelebilir ve önümüzdeki yıllarda sürdürülebilir ekonomik refah ve dayanıklılığın yolunu açabilir.

References

  • Bağcı, E., and Ergüven, E. (2016). Relations Between Interest Rate, Inflation, Growth, and Investment in Turkey, 2002-2015. ISOR Journal of Economics and Finance, 7(5), 43-49.
  • Bakari, S. (2018). The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria. Bulletin of Economic Theory and Analysis, 3(1), 35-51. https://doi.org/10.25229/beta.337367
  • Barro, R. J. (2013). Education and Economic Growth. Annals of Economics and Finance, 14(2), 301-328.
  • Bjelić, J., Erić, O., and Kovačević, S. (2021). Macroeconomic Determinants of Investment in the Balkan Countries . (2021). Acta Economica, 19(35), 19-33. https://doi.org/10.7251/ACE2135019B
  • Denano, T., and Sibera, S. (2022). The Causal Nexus between Economic Growth, Investment and Saving using Vector Error Correction Model in Ethiopia. Estudios de Economía Aplicada, 40(3), 25.
  • Ertek, T. (2000). Ekonometriye Giriş. İstanbul: Beta Yayıncılık, 2. Baskı.
  • Granger, C. W. J. (1969). Investigating Causal Relations by Econometric Models and Cross-spectral Methods. Econometrica, 37(3), 424-438.
  • Jangili, R. (2011). Causal Relationship Between Saving, Investment and Economic Growth for India–What Does the Relation Imply?.
  • Hordofa, D. F. (2023). Impacts of External Factors on Ethiopia's Economic Growth: Insights on Foreign Direct Investment, Remittances, Exchange Rates, and Imports. Heliyon, 28;9(12):e22847. doi: 10.1016/j.heliyon.2023.e22847.
  • Kartikasari, D. (2017). The Effect of Export, Import and Investment to Economic Growth of Riau Islands Indonesia. International Journal of Economics and Financial Issues, 7(4), 663-667.
  • Kaygısız, A. D., Dilek, G. Ö. Z. E., and Kösekahyaoğlu, L. (2016). Türkiye’de Tasarruf, Yatırım, Cari Açık ve Büyüme: 1980-2014 Dönemi Üzerine Bir Nedensellik İlişkisi Analizi. Çankırı Karatekin Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 7(1), 273-300.
  • Khan, S., Shenhadji, A. (2003). Financial Development and Economic Growth: A Review and New Evidence. Journal of African Economies, 12, AERC Supplement 2: ii89-ii110.
  • Kirmanoğlu, H. (2001). Is There Inflation-Growth Tradeoff in the Turkish Economy?. Universitäts-und Landesbibliothek Sachsen-Anhalt.
  • Kormendi, R. C., and Meguire, P. G. (1985). Macroeconomic Determinants of Growth: Cross-country Evidence. Journal of Monetary Economics, 16(2), 141-163.
  • Lee, J., and Strazicich, M. C. (2003). Minimum Lagrange multiplier unit root test with two structural breaks. Review of Economics and Statistics, 85(4), 1082-1089.
  • Lee, J., Strazicich, and M. (2004). Minimum LM Unit Root Test. Working Paper, Department of Economics, Appalachian State University.
  • Schmidt, P., and Phillips, P.C.B. (1992). LM Tests for a Unit Root in the Presence of Deterministic Trends. Oxford Bulletin of Economics and Statistics, 54, 257-287.
  • Sims, C. A. (1980). Macroeconomics and Reality. Econometrica: Journal of the Econometric Society, 1-48. Strazicich, M. C., Lee, J., and Day, E. (2004). Are Incomes Converging Among OECD Countries? Time Series Evidence with two structural breaks. Journal of Macroeconomics, 26(1), 131-145.
  • Lumsdaine, R. L., and Papell, D. H. (1997). Multiple trend breaks and the unit-root hypothesis. Review of Economics and Statistics, 79(2), 212-218.
  • Narayan, P. K., and Popp, S. (2010). A New Unit Root Test with Two Structural Breaks in Level and Slope at Unknown Time. Journal of Applied Statistics, 37(9), 1425-1438.
  • Narayan, P. K., and Popp, S. (2013). Size and power properties of structural break unit root tests. Applied Economics, 45(6), 721-728.
  • Tarı, R. (2010). Ekonometri (6th ed.). 2010: UmutTepe.
  • Valadkhani, A. (2003). Using Input-output Analysis to Identify Australia's High Employment Generating Industries. Australian Bulletin of Labour, 29(3), 199-217.
There are 23 citations in total.

Details

Primary Language English
Subjects Time-Series Analysis, Growth, Inflation, Cyclical Fluctuations
Journal Section Articles
Authors

Gülgün Çiğdem

Publication Date July 1, 2024
Submission Date April 28, 2024
Acceptance Date June 2, 2024
Published in Issue Year 2024

Cite

APA Çiğdem, G. (2024). THE FORCED EQUILIBRIUM: GROWTH, INFLATION, AND INVESTMENT: EMPIRICAL EVIDENCE FROM TURKIYE. Izmir Democracy University Social Sciences Journal, 7(1), 56-74. https://doi.org/10.61127/idusos.1474763