Financial capital flows and economic growth: the Turkish case

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Date

2010

Author

Kömürcüoğlu, Muammer

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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.

Subject Keywords

Business cycles., Business cycles.

URI

http://etd.lib.metu.edu.tr/upload/12612273/index.pdf
https://hdl.handle.net/11511/19823

Collections

Graduate School of Social Sciences, Thesis

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Citation Formats

M. Kömürcüoğlu, “Financial capital flows and economic growth: the Turkish case,” M.S. - Master of Science, Middle East Technical University, 2010.