TÜRKİYE'DE PARA TALEBİ VE ALTIN TALEBİ 1962 - 1976

Date

1977

Author

Keyder, Nur

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The purpose of the article is primarily to estimate a demand for money equation for Turkey, for the period 1962-1976 and compare the results reached here with the results of an earlier study (Keyder, 1977 : 87-100) for the period 1961-1973. As expected by the hypothesis, and in line with the findings of the earlier study, the demand for money is found to be directly related to income (elasticity is found to be around 1 for narrow definition and around 1.6 for broad definition of money), and inversely related to the expected rate of inflation (elasticity coefficient is found to be around -0.1). The interest rate proxy used is the rate of return calculated using the free market (brokers') selling price of the Government Saving Bonds (1962-1967) and the rate of return realized on the free market (brokers') sales of the interest coupons of these "bonds" (1968-1976). The parameter of the interest rate proxy is found to be insignificant and in some cases its sign is found to be positive, contrary to the hypothesis. Another finding contrary to the hypothesis and contrary to the results of the earlier study, is with respect to the parameter obtained for gold prices (proxys used are nominal price of gold, real price of gold, real price of gold with a year lag) which is found to be negative and significant only in the case of the broader definition of the demand for money (= money supply = currency in actual circulation plus commercial sight deposits plus sight saving deposits). The sign of the parameter obtained for gold price suggests that even when gold prices are increasing, people go on demanding gold and the demand for money decreases. In search for support, the demand for gold in the free market is regressed onto income (real and nominal) and the rate of change of the price of gold (real and nominal). The sign of the parameter (positive) obtained in relation to the rate of change of gold price came out to be consistent with the sign obtained for gold price in the demand for money equation. The findings with respect to gold within the context of the demand for money, may be representing a rush for gold as a reliable hedge against rapidly increasing rates of inflation realized especially in the last few years. It can be predicted that if inflation cannot be controlled, in the future, there can be growing tendency to put more money into gold. Here gold is actually serving as an alternative to saving deposits and may ultimately be causing a diversion of funds from customary channels like stocks and saving deposits. Naturally, research results using quarterly data1 would provide a much more reliable background against which predictions for the demand for money, incorporating such speculative behaviour, as in the case of gold, can be made. In Appendix 2, a $ - T.L. parity series, based on the free market gold prices realized in the country and abroad, is estimated. The resuts indicate that, especially during periods when there is a large gap between the official and the "effective" rate, the parity estimated seems to run close to the "effective" rate.

URI

https://hdl.handle.net/11511/110639

Collections

Department of Economics, Article