- Bartın Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi
- Vol: 12 Issue: 24
- Fiscal And Monetary Policies Effect on Borsa Istanbul (BIST) Performance
Fiscal And Monetary Policies Effect on Borsa Istanbul (BIST) Performance
Authors : Tuba Gülcemal
Pages : 357-375
Doi:10.47129/bartiniibf.1003836
View : 12 | Download : 8
Publication Date : 2021-11-30
Article Type : Research
Abstract :Our paper examines the impacts of monetary and fiscal policies on Borsa Istanbul (BIST) performance in Turkey. In the established model, government expenditures, tax revenue, budget deficit, money supply (M2), interest rate, gdp growth rate included as independent variables and BIST stock market capitalisation as dependent variable for last 25 years (1995 to 2020). Firstly, Augmented Dickey - Fuller (ADF) and Philips Perron (PP) unit root tests have been performed to the series for stationarity. To confirm long run relationship, Autoregressive Distributed Lag (ARDL) cointegration technique has been applied. Subsequently, error correction method has been used for analyzing short run relationship between series and causality relationship has been tested by granger casuality test. The test results, indicate the existence of long run relationship between both policies and stock market performance, while short run relationship exists only between budget deficit and gdp growth rate variables on stock market performance respectively positive and negative impact. The results also pointed out there is a bidirectional causality relationship between budget deficit and stock market performance. GDP growth also is the cause of stock market performance.Keywords : Monetary policy, fiscal policy, Autoregressive Distributed Lag (ARDL), VECM Granger Causality