Is Policy Interest Effectively Used in Turkey for Against Currency Substitution: Evidence from Fourier Area


BAYAT T., TAŞ Ş.

SOSYOEKONOMI, cilt.29, sa.50, ss.503-520, 2021 (ESCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 29 Sayı: 50
  • Basım Tarihi: 2021
  • Doi Numarası: 10.17233/sosyoekonomi.2021.04.23
  • Dergi Adı: SOSYOEKONOMI
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Sayfa Sayıları: ss.503-520
  • Anahtar Kelimeler: Currency Substitution, Policy Interest, Fourier Approximation, Causality, GRESHAM LAW, DOLLARIZATION, STATIONARITY, INSTABILITY, HYSTERESIS, INFLATION, DOLLAR
  • İnönü Üniversitesi Adresli: Evet

Özet

The phenomenon of currency substitution started in the Turkish economy during the transition to a free-market economy in the 1980s with the changing foreign exchange regime. In this context, the study, based on the January 2011-November 2020 period, Turkey's economy to prevent currency substitution, whether the weighted average funding rate is used effectively or not, is examined by traditional and Fourier causality tests. As a result of empirical analysis, it has been determined that currency substitution hysteria is experienced due to economic actors' deterioration in nominal exchange rate expectations. To rectify this situation, no interest rate hysteresis was experienced during the analysis period due to the inability to use the policy rate effectively. As the study's main question, both time and Fourier domain causality from average funding cost to money substitution could not be found.