Policy regime change and structural break in the velocity of money: The Turkish evidence

Cakan E., Ozmen E.

Applied Economics Letters, vol.9, no.11, pp.759-762, 2002 (SCI-Expanded) identifier identifier

  • Publication Type: Article / Article
  • Volume: 9 Issue: 11
  • Publication Date: 2002
  • Doi Number: 10.1080/13504850210128794
  • Journal Name: Applied Economics Letters
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.759-762
  • Middle East Technical University Affiliated: Yes


The integration properties of Turkish velocity series are investigated by employing recently developed procedures (Zivot and Andrews (1992) and Perron (Journal of Econometrics, 80, 355-85, 1997)) which allows stationarity around an endogenously estimated structural break point under the alternative hypothesis. The evidence suggests that real currency balances and currency velocity are stationary around a broken trend. The estimated break point coincides with a major policy regime change in Turkey. Broad money velocity and real broad money balances are found to be nonstationary even after allowance for a broken mean and trend.