Identifying Credit Supply Shocks in Turkey

Share
Print
Title:

Identifying Credit Supply Shocks in Turkey

Number:

19/06

Author(s):

Tayyar Büyükbaşaran, Gökçe Karasoy Can, Hande Küçük

Language:

English

Date:

February 2019

Abstract:

This paper aims to identify credit supply shocks and analyse their macroeconomic effects in Turkey. For this purpose, we use a Bayesian Structural Vector Autoregression (SVAR) with sign and zero restrictions. We focus on the impact of credit supply shocks on real GDP growth and highlight how the size of this impact changes when we explicitly account for the effects of capital inflows on credit conditions. Hence, our results confirm the importance of external finance for credit supply in Turkey. Our main findings are robust to some alternative data choices, prior selections as well as some alternative identifying restrictions.

Keywords:

Credit supply shocks, SVAR, Bayesian VAR, Sign and zero restrictions

JEL Codes:

C11; C32; E52; F41

Identifying Credit Supply Shocks in Turkey