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Book part
Publication date: 1 January 2005

Irfan Civcir

This chapter explains dollarization process in Turkey by an extended portfolio model where dollarization is determined by the relative rates of return of domestic and…

Abstract

This chapter explains dollarization process in Turkey by an extended portfolio model where dollarization is determined by the relative rates of return of domestic and foreign currencies denominated assets, expected change in the exchange rate, exchange rate risk, and credibility of current economic policies. The econometrics results are in line with the intuitive predictions of the model. We have found that interest rate differential and the expected exchange rates are the dominant variables in determining dollarization. This chapter also provides evidence of inertia in the process of dollarization in Turkey.

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Money and Finance in the Middle East: Missed Oportunities or Future Prospects?
Type: Book
ISBN: 978-1-84950-347-1

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Article
Publication date: 1 October 2003

Irfan Civcir

This paper investigates the empirical relationship between money, real income, interest rates, inflation and expected exchange rate, and examines the constancy of this…

Abstract

This paper investigates the empirical relationship between money, real income, interest rates, inflation and expected exchange rate, and examines the constancy of this relationship, especially in the light of financial reform, deregulation of financial markets and financial crises in Turkey. The estimation results show that expected exchange rate is statistically significant in the money demand function, indicating existence of currency substitution in Turkey. The dynamics of money demand is important, the inflation and income effects are much smaller in the short‐run than long‐run. The results also reveal that the demand for money in Turkey is stable, despite the economic reforms and financial crises.

Details

Journal of Economic Studies, vol. 30 no. 5
Type: Research Article
ISSN: 0144-3585

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Book part
Publication date: 1 January 2005

Abstract

Details

Money and Finance in the Middle East: Missed Oportunities or Future Prospects?
Type: Book
ISBN: 978-1-84950-347-1

To view the access options for this content please click here
Book part
Publication date: 1 January 2005

Abstract

Details

Money and Finance in the Middle East: Missed Oportunities or Future Prospects?
Type: Book
ISBN: 978-1-84950-347-1

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