Özet:

In the period before 1980, in Turkey, because the use of foreign currency by individuals was limited, the dollarization was not a major problem. After the Decisions of 24 January 1980, the regulation in the Kamboja regime prepared the ground for the demand for foreign currency for different purposes. Inflation reduces both the purchasing power of economic agents and the amount of cash assets held from the national currency. In the inflationist period, individuals want to escape the money of the unvalued country by investing their assets in investing instruments such as real estate, gold and currency. Turkey, where high inflation has been observed for many years, is among the countries that experience this dollarization process. In this study, where the relationship between dollarization and inflation in Turkey was studied, the Vector Otoregressive Model (VAR) was used as an econometric method. As a result of the variance division results, 0.63 per cent of a change of 1% in the inflation rate in the 10th period is explained by the dollarization rate; in the same period, 5.32 per cent of the change of 1% in the dollarization rate is explained by the inflation rate. The relationship between the variables was studied by the Johansen Integration Test and there was no long-term relationship between the two variables. According to Granger Causability findings, at the level of 10%, the dollarization rate is determined as the cause of inflation.

Özet:

In Turkey in the pre-1980 period, since the use of foreign currency of individuals was confined, dollarization was not a significant problem. After the decisions of January 24, 1980, regulation in the exchange regime paved the way for foreign currency to be demanded for various aims. Inflation decreases both purchasing power of economic agents and amount of cash assets held in national currency. In inflationary periods, individuals want to refrain from worthless national currency by investing their assets in investment instruments such as real estate, gold and exchange. Turkey, where high inflation has been observed for many years, is among the countries that have experiencing these processes of dollarization. In this study which investigated the relationship between dollarization and inflation in Turkey, Vector Autoregressive Model (VAR) was used as econometric method. As a result of the variance decomposition results, 0.63% of a 1% change in the inflation rate in the 10th period is explained by the dollarization rate; In the same period, 5.32% of the 1% change in dollarization rate is explained by inflation rate. The relationship between the variables was investigated by Johansen Cointegration Test and no long-term relationship was found between the two variables. According to the Granger Causality findings, dollarization rate is cause of inflation rate at significance level of 10%.

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