Financial capital flows and economic growth: the Turkish case

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2010
Kömürcüoğlu, Muammer
This study analyzes the effect of capital outflows on economic growth though the channels described in sudden stop literature. Using the autoregressive distributed lag (ARDL) bounds testing approach; it is found that there is a cointegration between capital inflows, real exchange rate and real GDP. The results show that there is a significant positive long-run relation between capital inflows and growth. It is also found that capital inflows affect real output in the short run. The results show that real exchange rate is not a significant determinant of real output both in the short run and long run. Moreover, in order to capture the dynamic responses, a vector autoregressive (VAR) methodology has been employed. The results show that a negative innovation in capital inflows causes real exchange rate depreciation and output contraction.
Citation Formats
M. Kömürcüoğlu, “Financial capital flows and economic growth: the Turkish case,” M.S. - Master of Science, Middle East Technical University, 2010.