Exogenous characteristics of short-term capital flows: can they be under control? evidence from Turkey
AbstractIn our paper, we give an essay trying to explore whether short-term capital flows can affect and/or be affected by some main domestic macroeconomic indicators called ‘pull’ factors such as real effective exchange rate, trade balance, real income growth process, domestic inflation and real interest structure for the case of Turkish economy. Our estimation results employing some contemporaneous estimation techniques of unrestricted dynamic vector autoregression (VAR) models reveal that short-term capital flows have in fact an important role on the ‘pull’ factors in the sense that inflows appreciate the real effective exchange rate and in turn deteriorate the trade balance, encourage the real income growth, and decrease the real interest rates. But we could not find any significant effects of the ‘pull’ factors on the capital flows.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 19504.
Date of creation: 2007
Date of revision:
Publication status: Published in İstanbul Üniversitesi Sosyal Bilimler Meslek Yüksekokulu Sosyal Bilimler Dergisi 1.2007(2007): pp. 1-16
Capital Flows ; VAR Modelling ; Turkish Economy ;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
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