Do the Business Cycles and Financial Cycles Move Together in Turkey? , Journal of Advances in Economics and Finance, s.19-26, May 2018.

Abstract: “In this paper, we analyzed the relationship between the financial and business cycles for the Turkish economy. The quarterly data covers from 2002: Q1 to 2017: Q1. In the paper, we employed HP filter, the concordance index (CI) method and dynamic conditional correlation (DCC) method in order to capture the main features of the interactions between the financial and business cycles. Our empirical findings showed that these cycles are immensely synchronized in the Turkish economy as found by many economists. The finding also revealed that the credit cycle is leading the business cycle while the business cycle is lagging the BIST100 cycle. These findings imply that financial variables have the strong impact on real economic activities in Turkey. Therefore, policymakers should pay attention to the financial issues in order to stabilize the economic developments.”