Abstract:

Globalization impacts fields such as economy, politics, culture, religion, science, health, medicine, sports, and education. With the globalization of the economy, which is one of the most important of these areas, substantial changes appear in consumer behavior and trends. This study investigates the relationship between consumption expenditures and globalization in Turkey using the VAR method. The data from 1987 to 2020 as a period were checked out, and they analyzed the relationship between the variables. Empirical findings show the existence of a long-run relationship between consumer spending and globalization in Turkey. According to the Granger analysis results, a one-way causal relationship between globalization to personal consumption expenditures has been determined. This analysis provides evidence for a causal relationship between GDP per capita and consumer spending and inflation. The variance decomposition results show that the effect of inflation on personal consumption is larger than the effect of the global shock. The results of the impulse-response analysis show that consumer spending is negatively affected by inflation and the per capita GDP shock. This framework, consistent with the empirical evidence, shows that policymakers should evaluate and focus on strategies to achieve price stability and counter global shocks. This is also important in terms of maintaining national welfare standards.

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