The behavior of velocity and its policy relevance in Turkey

Date

1998

Author

Keyder, Nur

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The purpose of this article is to update a former study on velocity (Keyder, 1989: 31-66), and also to question the use of the conventional money supply definitions as measures of the "liquidity" in the system. Since all variables involved are found to be non-stationary, cointegration tests are conducted using the residital-basecl ADFmethod proposed by Engle and Granger (1987). The long-run money demand and velocity function, using alternative liquidity definitions, is the focus of attention. The paper comprises six sections. The problem and the theoretical basis of the empirical analysis are stated in the introductory section. In the second section, institutional changes of the 1980s affecting the financial sector are briefly mentioned. In Section 3, the models to be tested are listed; in Section 4, the steps followed in econometric analysis are summarized; and in Section 5, the estimation results are reported and evaluated. Section 6 is reserved for the conclusions.

URI

https://hdl.handle.net/11511/108416

Collections

Department of Economics, Article