The effect of negative real interest rate on mocroeconomic indicators: The case of Turkey

Throughout history, the relationship between money and the economy has been frequently discussed by researchers. With the transition to a production economy, the relationship between the real sector and the financial sector has been analysed more in the economics literature, both theoretically and practically. In this context, this study aims to analyse the effect of interest rates on inflation in Turkey from a cyclical perspective and to provide a new perspective to the existing debates. The aim of this study is to make it possible for the findings to contribute to the literature by analysing the interactions between economic policies. The transition to a production economy has necessitated a more detailed analysis of the dynamics between the real sector and the financial sector. In particular, the effects of interest rates on inflation in Turkey will be analysed from a historical perspective in this study. This analysis aims to understand how economic policies interact and to add a new dimension to the existing discussions in the literature. This study aims to contribute to the existing literature by taking historical periods into account while analysing the impact of interest rates on inflation in Turkey. In this context, the interaction of economic policies and the results of these interactions will be emphasised. The findings of the study will provide a new perspective to the literature and provide information that may be useful in the formulation of economic policies. The aim of the study is to express the importance of the concept of real interest rate in macroeconomics and to examine the interaction of the determined interest rate with inflation with the phenomenon of negative real interest rate. The effects of negative real interest rate indicators on certain macroeconomic indicators, the direction and magnitude of the relationship, examining the approaches related to this practice and discussing the economic effects on Turkey are also among the objectives of the study. It is known that the change in production patterns with the rapid industrialisation observed in the world and Turkey and the effects of the transforming financial system on the economy have led to the emergence of new approaches and new theories. It is very important to understand the interaction of macroeconomically important concepts such as interest, inflation, employment and production in the theories shaped in the historical process. Analyzing the reflection of inflation and interest rate interaction on the real economy in ensuring macroeconomic balance and planning the production activities of goods and services is of great importance in terms of developing policies in planning the future of the economy. Literature review on the subject, domestic and foreign research works, articles, and processes have been examined within the scope of this study and master's and doctoral theses have been scrutinised. Using the data of the Central Bank of the Republic of Turkey (TUK, which provides a source of information about the economy, the concept of negative real interest rate in interaction with the concept of inflation is explained and its effects on Turkey's macroeconomic performance are analyzed.