Abstract:

The aim of this study is to examine the determiners of the private consumption spending in the Turkish economy with quarterly data between 2000:3 and 2020:2 . In the framework of the study, first and foremost, private consumption spending has contributed to the course of years and economic growth. The stagnations of the variables included in the model were tested with traditional unit root tests and Fourier unit root tests. According to the unit root test results, the long-term relationships between unstable series at the level were studied by the Fourier-Shin matching test and the ARDL border test approach. As a result of the integration test, it was found that the series were moving together for a long period of time. According to the ARDL limit test, series that reflect GDP variable and net change in assets have had a positive impact on specific consumption spending as expected. The 1% increase in GDP increases private consumption spending by 0.61%. The increase in interest rates reduces private consumption spending, as theoretically is expected. The size of the effect is relatively small. The selected inflation variable representing uncertainty in the economy affects the private consumption spending in a negative direction. An increase of 1% in inflation rates leads to a 0.59% reduction in private consumption spending. Public spending affects private consumption spending in a negative direction. A 1% increase in public spending reduces private consumption spending by 0.34%. This result shows that the part of the Ricardocu equality in the Turkish economy is valid.

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