Open AccessThe Effect of Hot Money Flow on Pre-Crisis Indicators of Current Accounts and Real Sectors in Turkish Economy
Author(s) -
Ömer Uğur Bulut,
S. Rıdvan Karluk
Publication year - 2016
Publication title -
international journal of business and social research
Language(s) - English
Resource type - Journals
eISSN - 2164-2559
pISSN - 2164-2540
DOI - 10.18533/ijbsr.v6i11.1014
Subject(s) - turkish economy , current account , economics , inflation (cosmology) , monetary economics , vector autoregression , macroeconomics , turkish , financial crisis , international economics , exchange rate , philosophy , linguistics , physics , theoretical physics
We investigate the impact of the hot money movements on current account and real sector leading crisis indicators under VAR (Vector Autoregressive) framework using quarterly data for a long period of 1991-2014. Our findings show that hot money movements have negative impact on current account deficit and foreign trade deficit pre-crisis indicators. We further show that they lead to instability in growth and inflation pre-crisis indicators.