THE RELATIONSHIP BETWEEN DOMESTIC CREDIT VOLUME AND UNEMPLOYMENT: A CASE OF TÜRKİYE

Abstract

Credits, which are the most important tool of the banking system for developing countries as well as developed countries to continue their economic activities, cause the development of countries, the full efficient use of the existing labor market, the increase in investments, and the increase in the welfare level of the country's economies. Credits are one of the most important factors that strengthen the macroeconomic financial support of banks in a country's economy. The aim of this study is to analyze the relationship between the volume of domestic credit given by the banking sector in Turkey and the unemployment rate using the data for the period 2010:M01-2022:M12. As a result of the cointegration analysis, a long-term 23.8% negative relationship was determined between domestic credit volume and unemployment. In short-term relationship analysis; It has been determined that the coefficient of the error correction term is negative and statistically significant, that is, the error correction mechanism of the model works. It has been determined that the increase in the credit volume in Turkey has a reducing effect on the unemployment rate.