The relationship between oil prices and economic policy uncertainty in Türkiye

Economic policy uncertainty has long been a debated concept in economics. The underlying reason for the discussions on this issue is that there is no consensus among economists and there are different approaches on this issue. In this thesis, the relationship between economic policy uncertainty and oil prices was investigated and the factors affecting the relationship were examined. In the study, the news-based economic policy uncertainty index, developed by Baker et al. (2016) for the United States of America, was adapted for Türkiye and used as an evaluation tool that includes strong and political elements. In addition, Brent crude oil price data from the first month of 1996 to the fifth month of 2018 were evaluated within the scope of the analysis.In this context, a detailed examination of the relationship between oil prices and economic policy uncertainty in Türkiye was aimed and the nature of the interactions between the variables was tried to be revealed. In the analysis, the relationship between oil prices and economic policy uncertainty was examined with analytical methods such as Phillips-Perron Unit Root Test and Bootstrap Rolling Window Causality test to evaluate economic policy uncertainty. The findings show that the increase in oil prices is an influencing factor of economic policy uncertainty and provide important insights into how the impact of changes in economic policy uncertainty on oil prices evolves over time. This study provides an important framework for economic policy makers, analysts and academics to contribute to the understanding of economic dynamics in Türkiye. Keywords: Economic policy uncertainty, Oil prices, Phillips-Perron Unit Root Test, Bootstrap Rolling Window Causality Test