AN ECONOMIC ANALYSIS ON THE EFFECT OF THE VOLUME OF DOMESTIC CREDIT ON UNEMPLOYMENT IN TURKEY

Abstract

In this study, in Turkey given domesticstatistics by the banking sector the relations between the volume of loans and the unemployment rate 2005: M01-2019: M02 period data were analyzed. In correlation analysis; there was a negative but small relationship between credit volume and unemployment rate. Stability of series; ADF, PP and Kapetanios (2005) that were examined with multiple structural fracture unit root test and the series were found to be I (1). Existence of cointegration relationship between series; Maki (2012) has been examined with cointegration test with multiples tructural breaks and it is found that there is a cointegration relationship between the series. Long-term coefficient analyzes were carried out by FMOLS method and it was determined that when the domestic credit volume increased by 1 unit, the unemployment rate increased by 0.024 units, and the crises and other structural break-up dates had unemployment-increasing effects. In short-termanalysis that was carried out with the FMOLS method and it was determined that the increase in credit volume had a positive impact but small effect on unemployment rate in the short term. Again in the short-term analysis; The coefficient of error correction term was negative and statistically significant; In other words, it is determined that the error correction mechanism of the model works and the results of the long-term analysis are reliable. In the long period; along with the series together moving between unemployment and credit volume, the deviations occurring in the short term; 29.1% disappears every year. The causality analysis between the series were performed by Granger (1969) method and a one-way causality relationship was found from the unemployment rate to the domestic credit volume.