The effect of monetary policies on financialization: The case of Turkey

Monetary policy and interest rates have been used as an essential tool to reduce the effects of financial crises in developed economies since the 2000s. These policy instruments used in developed economies have been also important for the financialization process of developing countries. This thesis' research question is how monetary expansion since the 2000s (and particularly the monetary policy after the 2008 Financial Crisis) have been affecting developing countries' financialization? Accordingly, the focus has been on the so-called "Fragile Five" countries' (Brazil, South Africa, India, Indonesia and Turkey) financialization process between 2000 and 2019. Thus, Turkey is selected as a case to explain the continitues and differences among the Fragile Five countries' financialization, which was measured according to the common indicators in the literature. According to the findings of the study, Turkey's financialization indicators diverged considerably among other Fragile Five countries. The argument asserts that Turkey's divergence in financialization after 2008 among Fragile Five countries can be explained better by the changes in institutional structure at domestic level. The thesis also discusses policy implications during Turkey's financialization process according to its economic growth policy.