The credit volume and its relations with money supply in Turkey: the Bai-Perron and Wavelet coherence analysis

Bilgehan Tekin and Fatma Temelli
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Bilgehan Tekin: Faculry of Economics and Adminisrative Sciences, Çankırı University
Fatma Temelli: Ağrı İbrahim Çeçen University

Ekonomski pregled, 2024, vol. 75, issue 5, 363-379

Abstract: Structural breaks in credit volume refer to sudden and significant changes in the extent to which credit is extended by financial institutions. These breaks can occur for various reasons, such as changes in lending standards, shifts in economic conditions, or changes in government policies. A structural break in credit volume can have important implications for the broader economy, including impacts on economic growth, inflation, and financial stability. This study focuses on multiple structural breaks and the relationship with the money supply of the credit volume of deposit banks from 2006 to 2022 when vital economic, financial, political, and social developments were experienced in Turkey and the world. The Central Bank of the Republic of Turkey provides the data used in the analysis, including the total loans provided to economic actors by deposit banks. Bai and Perron’s multiple structural break test and wavelet coherence methods were used for the data analysis. As a result of the study, five structural break dates in credit volume were determined, and the reasons for these breaks were emphasized. Furthermore, wavelet coherence analysis shows that money supply and credit volume move together in the long run.

Keywords: Credit Volume; Bai-Perron; Structural Breaks; Money Supply; Wavelet Coherence (search for similar items in EconPapers)
JEL-codes: G12 G23 G39 (search for similar items in EconPapers)
Date: 2024
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