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Testing quantity theory of money for the Turkish economy

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  • Levent, Korap

Abstract

In this paper, it is tried to test the main assumptions of the Quantity Theory of Money for the Turkish economy. Using some contemporaneous estimation techniques to examine the long-run stationary economic relationships on which the quantity theory is constructed, it is found that stationary characteristics of the velocitities of narrowly and broadly defined monetary aggregates cannot be rejected. However, monetary aggregates seem to be endogenous for the long-run evoluation of prices and real income. It is concluded that monetary authorities follow an accommodative monetary policy inside the period given the endogeneity of the monetary variables.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 21704.

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Date of creation: 2007
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Publication status: Published in Journal of BRSA Banking and Financial Markets 2.1(2007): pp. 93-109
Handle: RePEc:pra:mprapa:21704

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Keywords: Theory of Money ; Neutrality ; Co-integration ; Turkish Economy ;

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  17. Erdan Ozmen, 2003. "Testing The Quantity Theory of Money in Greece: A Note," ERC Working Papers, ERC - Economic Research Center, Middle East Technical University 0310, ERC - Economic Research Center, Middle East Technical University, revised Oct 2003.
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Cited by:
  1. Levent, Korap, 2009. "The search for co-integration between money, prices and income: low frequency evidence from the Turkish economy," MPRA Paper 19557, University Library of Munich, Germany.
  2. Alimi, R. Santos, 2012. "The Quantity Theory of Money and Its Long Run Implications: Empirical Evidence from Nigeria," MPRA Paper 49598, University Library of Munich, Germany.

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