Analysis of short-term capital movement impact on the economic variables for Turkey (2005-2018)

The aim of this study is to investigate the effects of short term capital movements on economic variables and the effects of the ratings given by credit rating agencies on short term capital movements. In the first part of the study, the conceptual framework on capital movements, in the second chapter, the rating methods of credit rating agencies, in the third chapter, the development of capital movements in Turkey, and in the fourth section, the relationship between Short Term Capital Flows, Gross Domestic Product, Real Effective Exchange Rate, Consumer Price Index (Expenditure Method), Nominal Interest and Credit Ratings are analyzed. In the analysis, unit root tests of the variables were performed. then ARDL boundary test was applied to determine the long-term relationship of variables, Toda-Yamamoto Granger causality test was performed for the causality relationship between variables and the latest variables were subjected to regression analysis. The relationship between economic variables and KVSH coming to Turkey, we have examined in this study, cointegration relationship between variables could not be determined. According to the Toda-Yamamoto Granger causality test, causality has been found in the previous periods from Gross Domestic Product and Nominal Interest to Short-Term Capital Movements. According to the Toda-Yamamoto Granger causality test, causality has been found in the previous periods from Gross Domestic Product and Nominal Interest to Short-Term Capital Movements. In the regression analysis, it was concluded that while Short Term Capital Movements and Gross Domestic Product mutually affect each other, Short Term Capital Movements also affect credit ratings. According to the results of the study, the entry of KVSH into the borders of the country leads to the appreciation of the national currency, the increase in the consumption trend due to the local currency valued and the increase of the GDP. However, increasing GDP and emerging market mechanism and increasing profits attract KVSH to the country. According to the regression results; While credit ratings do not affect KVSH, it is seen that KVSH affects credit ratings and can be explained as KVSH taking position before grade increases / decreases according to the course of the market.