Analysis of international gross capital movements at financial crisis terms in Turkey

The main aim of this research is to identify the capital flows which are a part of the movements of capital flows in the financial account of current account balance during the crisis in Turkey between 1998 and 2013, and to investigate macroeconomic and financial dynamics causing the movements. With this purpose, in the first part of the research, the concept of financial crisis in globalizing world; in the second part, international capital flow; and in the third part, approaches of regional movement and functions of international capital flow in terms of modern-day economic conjuncture was investigated theoretically. In the fourth part of the research, the methods and models of the research were defined by reviewing the empirical and theoretical literature on the relationship between the crisis and capital. According to research results, the capital flow changes during crisis times, especially foreign investors act differently than domestic investors during those times. It is confirmed that before the crises in 1998 and 1999, a huge amount of foreign capital entered the country, and foreign investors who left the country before the first crisis in 2001, started to come back to Turkey after the second crisis in the same year. Foreign capital flow which enters the country intensely before the global crisis which started in the USA at the end of 2007, left the country when the crisis peaked, and domestic capital which was abroad previously seized the investment areas which were left by foreign investors. . Between 1998 and 2013, it is estimated that 12 financial crises were experienced in Turkey, and, it has been observed that no crises experienced between the 27-month-period during 2002, 2003, 2004 and 15-month-period during 2005, 2006, 2007. It is concluded that; the huge rise in net errors and omissions in the current account balance during the first period without crisis, and sudden leap in portfolio investments to the country in the second period in which crisis was not confirmed, were highly effective. It is determined that the movements of variances which explain crisis (Borsa Istanbul 100 Index, Growth rate of economy, inflation rate, real interest rate, exchange rate, ratio of money supply in terms of exchange rate to GDP, ratio of money supply in terms of exchange rate to Turkish Lira, changes in the reserves, export import coverage ratio, Net errors and omissions) differ in crisis periods (before crisis, peak of crisis, after crisis) which was confirmed by EMP model.