CEU Electronic Theses and Dissertations, 2008
| Author | Donmez, Oben |
|---|---|
| Title | THE FISHER EQUATION EXAMINED: IMPLICATIONS FOR THE MONEY DEMAND IN TURKEY |
| Summary | This thesis investigates the money demand in Turkey using monthly data from 1986:1 to 2003:12. The investigation starts off by testing the Fisher equation and results suggest that the Fisher equation does not hold in Turkey. This result justifies the inclusion of the inflation variable in the estimation of money demand function. The empirical analysis carried out by means of the Johansen multivariate cointegration analysis and, cointegration analysis indicates that there is a stationary long-run relationship between money, output, inflation and interest rate. Robustness of the analysis is checked by estimating the money demand function when excluding the inflation variable and the results are not supportive of exclusion of inflation rate. Finding a stable money demand function in a period characterized as politically and economically instable might be surprising, but it might also provide suggestion of using the money aggregates as policy instrument. Moreover the variables in a stable money demand function might be important while forecasting the inflation as well. |
| Supervisor | Max Gillman |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2008/donmez_oben.pdf |
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