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Impact of Consumer Loans on Inflation and Current Account Deficit: A Toda Yamamoto Causality Test for Turkey

Author

Listed:
  • Serhat Yuksel

    () (Istanbul Medipol University, School of Business)

  • Mustafa Ozsari

    (Konya Food and Agriculture University, Department of Economics)

Abstract

This study aims to investigate the causality relationship between consumer loans and inflation, and consumer loans and current account deficit in Turkey. In this scope, Toda Yamamoto causality test is used for the periods between 1994:1 and 2015:3. According to test results, we found that there is no causal relationship between consumer loans and inflation rate, and consumer loans and current account deficit. In other words, changes in consumer loans do not lead neither high current account deficit rates nor high inflation rates in Turkey. Therefore, limiting consumer loans is not the solution for inflation and current account deficit problems of Turkey and policy makers should apply some other effective policies to solve high CA deficit and high inflation problems.

Suggested Citation

  • Serhat Yuksel & Mustafa Ozsari, 2016. "Impact of Consumer Loans on Inflation and Current Account Deficit: A Toda Yamamoto Causality Test for Turkey," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 2(2), pages 3-14, December.
  • Handle: RePEc:ana:journl:v:2:y:2016:i:2:p:3-14
    DOI: 10.22440/wjae.2.2.1
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    File URL: https://journal.econworld.org/index.php/econworld/article/view/20/12
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    References listed on IDEAS

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    Cited by:

    1. Egzona Hani Selimi & Milan Eliskovski, 2018. "The effect of household and enterprise credit on current account balance: Evidence from the Republic of North Macedonia," Working Papers 2018-09, National Bank of the Republic of North Macedonia.

    More about this item

    Keywords

    Consumer Loans; Inflation; Current Account Deficit; Johansen Co-integration Test; Toda Yamamoto Causality Test;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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