American Journal of Applied Sciences

Currency Substitution in Turkey

Ismail H. Genc, Hasan Sahin and Turan Erol

DOI : 10.3844/ajassp.2005.920.925

American Journal of Applied Sciences

Volume 2, Issue 5

Pages 920-925


We investigated whether the recent depreciations in the Turkish currency (Lira) resulted in the currency substitution away from Lira by using quarterly data over the period from 1987:1 to 2000: 2 with M1 and M2 monetary aggregates and income, interest rate and exchange rate. Other than the variety of monetary aggregates, we tried different ways of including the interest rate into the models to ensure the robustness of our results. Our analysis shows that the currency substitution in fact happened with Lira.


© 2005 Ismail H. Genc, Hasan Sahin and Turan Erol. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.