Abstract:

This article aims to explore the long-term and short-term balance relations between the Stock Exchange of Istanbul and some macroeconomic variables. In this study, the monthly data of the BIST-100 Index are selected to show the exchange; (i) the main monthly average interest rates applied to the deposits opened by banks, (ii) monthly cash supply, (iii) monthly dollar currency value (iv) monthly Euro currency value, (v) monthly London sales price of ounce gold, (vi) monthly domestic debt interest rates, (vii) monthly data of the SP-500 Index, (vii) monthly gross price of the ITO's general index was used to show the macroeconomic variables. First of all, the variables were tested; I(1) was identified as a combination with those. I(1) is based on the VARs and the Johansen technique and the combination relationship is determined after the Vector Error Correction Model (VECM) and the short-term relationships and long-term balance relationships in the stock exchange are identified. The BIST-100 Index; the interest rates of domestic debt, the SP-500 Index and the cash supply are increasing (down) in the long term; the major average interest rates applied to the deposits opened by euros, dollars, ounces of gold and banks are increasing (down) in the long term (down).   Keywords: stability, integration, vector error correction model, stock exchange