Economics at your fingertips  

Money and Physical Capital Relationship: McKinnon’s Complementarity Hypothesis on Turkey’s Economy

Muhammad Mehtab Azeem and Ayub Mohammad ()
Additional contact information
Muhammad Mehtab Azeem: Istanbul Aydin University, Turkey

Expert Journal of Finance, 2015, vol. 3, issue 1, 21-30

Abstract: A complementary relationship between money and physical capital, emphasis on liberalization, financial liberalization theory and increased real interest rates will lead to a surge in money demand and investment. In this research paper, the validity of this hypothesis, which is also known as McKinnon's complementarity hypothesis, in terms of financial liberalization policy has been tested empirically to examine the performance, money demand, interest rate and investment size in order to attempt to designate the respective relationship in Turkey. In this study, over the period of 1999Q1-2014Q4 in Turkey, the relationship between money and physical capital for available data is investigated through the BOUND and ARDL test methods. Empirical analysis of the findings suggests that Turkey's economy is based on a limited complementary relationship between money and physical capital.

Keywords: financial liberalization; McKinnon's complementarity hypothesis; money and physical capital; Bound test and ARDL method (search for similar items in EconPapers)
JEL-codes: G32 F38 F40 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link) (application/pdf) (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Expert Journal of Finance from Sprint Investify
Bibliographic data for series maintained by Alin Opreana ().

Page updated 2019-01-01
Handle: RePEc:exp:finnce:v:3:y:2015:i:1:p:21-30