Political monetary cycles: The case of Turkey

Thesis Type: Doctorate

Institution Of The Thesis: Uludağ Üniversitesi, Turkey

Approval Date: 2017

Thesis Language: Turkish


Supervisor: HÜLYA AKAY


"Political Business Cycle Theories" refers to the economic fluctuations that arose in order to be able to reelect the party in power throughout the election period by means of the use of economic policy instruments. With the elections, the government's power to change its monetary and fiscal policies can lead to the abuse of the "state's benevolent dictator position". For this reason, the school of public choice is trying to explain this concept with the help of political business cycles theories in order to prevent the "failure of the state" concept. PBC theories consist of four models, "The Traditional Opportunist PBC Theory", "The Traditional Partisan PBC Theory", "The Rational Opportunist PBC Theory" and "The Rational Partizan PBC Theory". Since the structure of the Turkish electorate is more in line with the "Traditional Opportunist PBC Theory", this thesis has been analyzed on the basis of theory. The study examined the collective effect of the eight general elections held in Turkey between 1987 and 2016 and examined money in circulation (M0), M1 money supply, M2 money supply, M3 money supply, domestic credits and interbank interest rate monthly series whether it is valid in terms of the assumptions of "Traditional Opportunist PBC Theory". "Seasonal Box-Jenkins Models" were used in the analysis of the series. According to the result of the study, there is a political business cycles on circulation money (M0), M1 money supply, M2 money supply, M3 money supply and monthly series of domestic credits. However, in the monthly series of interbank interest rates, no political business cycles exists. According to this, between 1987-2016, elections are generally political conjunctions over monetary policy indicators according to the collective effects.