Macroeconomic variables and the housing market in Turkey

Sari R., Ewing B. T. , AYDIN B.

EMERGING MARKETS FINANCE AND TRADE, vol.43, no.5, pp.5-19, 2007 (Peer-Reviewed Journal) identifier identifier

  • Publication Type: Article / Article
  • Volume: 43 Issue: 5
  • Publication Date: 2007
  • Doi Number: 10.2753/ree1540-496x430501
  • Journal Indexes: Social Sciences Citation Index, Scopus
  • Page Numbers: pp.5-19
  • Keywords: employment, housing investment, monetary policy, variance decompositions., IMPULSE-RESPONSE ANALYSIS, MULTIVARIATE MODELS, COINTEGRATION, COUNTRIES, DEMAND, SHOCKS, MONEY


This paper investigates the relation between housing starts and macroeconomic variables in Turkey from 1961 to 2000. The generalized variance decomposition approach is used to examine relations between housing market activity and prices, interest rates, output, money stock, and employment. In contrast to previous findings for developed countries, our results indicate that the monetary aggregate has a relatively more important and substantial effect on housing investment than does employment. Generally speaking, shocks to interest rates, output, and prices have noticeable effects on changes in the Turkish housing market.