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The Gibson Paradox: An Empirical Investigation for Turkey

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  • Dr Ferda Halicioglou

Abstract

This paper tests the existence of Gibson paradox using the traditional and modern time series techniques in the case of a developing country, Turkey. Even though the results from the traditional Gibson paradox regression suggested a positive relationship between the interest rates and the prices levels in Turkish data, subsequently it was proven to be spurious. On analyzing the time series properties of the variables and the results from the Johansen cointegration procedure, we reveal that there is no support of the Gibson paradox in Turkish data.

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  • Dr Ferda Halicioglou, 2004. "The Gibson Paradox: An Empirical Investigation for Turkey," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 111-120.
    • Handle: RePEc:ers:journl:v:vii:y:2004:i:1-2:p:111-120
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    Cited by:

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    2. Ferda Halıcıoğlu & Kasım Eren, 2017. "Testing Twin Deficits and Saving-Investment Nexus in Turkey," Yildiz Social Science Review, Yildiz Technical University, vol. 3(1), pages 35-46.
    3. Seçkin Kabak & Tuðçe Dallý, 2023. "Gibson Paradox: Panel Data Analysis on ASEAN-T Countries," International Econometric Review (IER), Econometric Research Association, vol. 15(1), pages 12-27, March.

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    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

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