AN ECONOMIC ANALYSIS ON THE EFFECT OF THE VOLUME OF DOMESTIC CREDIT ON UNEMPLOYMENT IN TURKEY

Burcu Kılınç Savrul () and Tuğba Akyel ()

Eurasian Business & Economics Journal, 2020, vol. 23, issue 23, 1-19

Abstract: In this study, in Turkey given domesticstatistics by the banking sector the relations between the volume of loans and the unemployment rate 2005: M01-2019: M02 period data were analyzed. In correlation analysis; there was a negative but small relationship between credit volume and unemployment rate. Stability of series; ADF, PP and Kapetanios (2005) that were examined with multiple structural fracture unit root test and the series were found to be I (1). Existence of cointegration relationship between series; Maki (2012) has been examined with cointegration test with multiples tructural breaks and it is found that there is a cointegration relationship between the series. Long-term coefficient analyzes were carried out by FMOLS method and it was determined that when the domestic credit volume increased by 1 unit, the unemployment rate increased by 0.024 units, and the crises and other structural break-up dates had unemployment-increasing effects. In short-termanalysis that was carried out with the FMOLS method and it was determined that the increase in credit volume had a positive impact but small effect on unemployment rate in the short term. Again in the short-term analysis; The coefficient of error correction term was negative and statistically significant; In other words, it is determined that the error correction mechanism of the model works and the results of the long-term analysis are reliable. In the long period; along with the series together moving between unemployment and credit volume, the deviations occurring in the short term; 29.1% disappears every year. The causality analysis between the series were performed by Granger (1969) method and a one-way causality relationship was found from the unemployment rate to the domestic credit volume.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eas:buseco:v:23:y:2020:i:23:p:1-19

DOI: 10.17740/eas.econ.2020.V23-01

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