Abstract
Turkey had been economically thriving after the end of the economic crisis of 2001. Nonetheless, the recent depreciation of the Turkish lira proved the eventual fragility of the Turkish economy. This research attempts to examine whether the financial markets behavior had forecast this economic collapse. The results support that negative dynamics take place between the nominal exchange rate of Turkish lira and the Turkish stock market index in the long-run. Simultaneously, it is estimated that the uncovered equity parity had been in effect during the last decade but its impact highly deteriorated after March 2018. The Turkish policy makers will sooner or later have to either abandon the low interest rate policy or apply for financial assistance from the IMF.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
