IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY

Sule Gunduz; Burçak Müge Tunaer Vural

doi:10.35343/kosbed.645777

IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY

Abstract

Monetary policy regaining popularity post 2008 period, massively increased the balance sheets of Turkish Central Bank balance sheet al well by 348 per cent from 2010 until 2019. Disconnect between Turkish macroeconomic growth and the monetary base, however, increases the question on effectiveness of monetary policy implemented by the Turkish Central Bank. Main purpose of this research is to investigate the effectiveness of monetary policy. To this end, we implement an empirical analysis of the relationship between monetary policy, bank loans and economic activity. Findings reveal that the monetary transmission mechanism through bank lending channel is not effective in Turkey. Monetary policy shifts change loan supply. Yet, the production remains unresponsive to the changes in interest rates, rendering monetary policy ineffective. Despite increasing loan supply, gross domestic product does not increase significantly. By the same token, contractionary monetary policy shifts do not hold the inflation down.

Keywords

Monetary transmission mechanism,Bank-lending channel,Impulse Response

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Details

Primary Language

English

Subjects

Economics

Journal Section

Research Article

Authors

Sule Gunduz ^*
0000-0001-5484-5795
Türkiye

Burçak Müge Tunaer Vural
0000-0002-4252-6276
Türkiye

Publication Date

December 31, 2019

Submission Date

November 12, 2019

Acceptance Date

December 18, 2019

Published in Issue

Year 2019 Volume: 2 Number: 38

DOI

https://doi.org/10.35343/kosbed.645777

IZ

https://izlik.org/JA58BX67WZ

Cite

RIS / Bibtex

APA

Gunduz, S., & Tunaer Vural, B. M. (2019). IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY. Kocaeli Üniversitesi Sosyal Bilimler Dergisi, 2(38), 279-292. https://doi.org/10.35343/kosbed.645777

AMA

1.Gunduz S, Tunaer Vural BM. IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY. KOSBED. 2019;2(38):279-292. doi:10.35343/kosbed.645777

Chicago

Gunduz, Sule, and Burçak Müge Tunaer Vural. 2019. “IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY”. Kocaeli Üniversitesi Sosyal Bilimler Dergisi 2 (38): 279-92. https://doi.org/10.35343/kosbed.645777.

EndNote

Gunduz S, Tunaer Vural BM (December 1, 2019) IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY. Kocaeli Üniversitesi Sosyal Bilimler Dergisi 2 38 279–292.

IEEE

[1]S. Gunduz and B. M. Tunaer Vural, “IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY”, KOSBED, vol. 2, no. 38, pp. 279–292, Dec. 2019, doi: 10.35343/kosbed.645777.

ISNAD

Gunduz, Sule - Tunaer Vural, Burçak Müge. “IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY”. Kocaeli Üniversitesi Sosyal Bilimler Dergisi 2/38 (December 1, 2019): 279-292. https://doi.org/10.35343/kosbed.645777.

JAMA

1.Gunduz S, Tunaer Vural BM. IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY. KOSBED. 2019;2:279–292.

MLA

Gunduz, Sule, and Burçak Müge Tunaer Vural. “IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY”. Kocaeli Üniversitesi Sosyal Bilimler Dergisi, vol. 2, no. 38, Dec. 2019, pp. 279-92, doi:10.35343/kosbed.645777.

Vancouver

1.Sule Gunduz, Burçak Müge Tunaer Vural. IMPACT OF CREDIT EXPANSION ON ECONOMIC ACTIVITY IN TURKISH ECONOMY. KOSBED. 2019 Dec. 1;2(38):279-92. doi:10.35343/kosbed.645777