A DOUBLE EDGED SWORD: COVID-19 AND EMISSION: PROOFS FROM TURKEY

Authors : Gülgün Çiğdem

Pages : 1-12

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Publication Date : 2020-08-07

Article Type : Research

Abstract :ABSTRACT Purpose - This work inquires whether there's a correlation between Covid-19 and the emission in Turkey. Methodology - For this purpose, the daily data on COVID-19 seen in Turkey (cumulative case and infection rate data from Public Health Experts Association (HASUDER)) and daily emission data obtained from the Central Bank of Turkey (CBT) balance sheet for the period between 11 March-22 May 2020 were tested using the ARDL Bounds Test Approach and analyzed within the frame work of the Error Correction Model (VECM). And to query short-run relationship, Granger Test over the VECM Model has been applied. Findings- According to the analysis result; i.There is a cointegration in the long run between COVID-19 and the emission, and is statistically significant. Ii.There is a bidirectional causality between the variables in the short run. Iii. There is a positive correlation between emission and infection rate. Conclusion- The demand for money in this process, which started with a health crisis and turned into a global economic crisis with a global shock of uncertainty, caused sharp increases in the emission volume in the short term. However, inflation will follow this sharp increase in emissions. For the central bank, whose main purpose is to ensure price stability, COVID-19 and emission are a double edged sword. This study contributes to the formation of literature on COVID-19 and is also noteworthy for its results.
Keywords : Emission, Covid-19, Bounds Test