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Testing Quantity Theory of Money for the Turkish Economy


  • Özgür Aslan
  • Levent Korap


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.

Suggested Citation

  • Özgür Aslan & Levent Korap, 2007. "Testing Quantity Theory of Money for the Turkish Economy," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 1(2), pages 93-109.
  • Handle: RePEc:bdd:journl:v:1:y:2007:i:2:p:93-109

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    References listed on IDEAS

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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. Osuji Casmir Chinaemerem & Nzotta Samuel Mbadike & Ebiringa Oforegbunam Thaddeus & Chigbu Emmanuel Ezeji, 2015. "Money control indicators and investment in Nigeria," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 1(2), pages 12-19, June.
    3. 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.

    More about this item


    Quantity Theory of Money; Neutrality; Co-integration; Turkish Economy.;

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination


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