Time-varying causality between money supply growth and inflation: new evidence from Turkey

ABSTRACT

This research investigates the causal links between money supply growth and inflation in Turkey. Unlike previous literature, In the investigation of causality, time-varying causality tests were applied. The results indicate that there is causality from money supply growth to inflation. However, it emphasizes that when time-varying causality is considered, causality is not homogeneous throughout the sample, but heterogeneous, more sensitive to structural breaks.

KEYWORDS:

• money supply
• inflation
• time-varying causality tests
• structural breaks

JEL CLASSIFICATION:

• E51
• C32
• E31

Disclosure statement

No potential conflict of interest was reported by the authors.