The causal nexus of interest rate policy and gold market
The case of Turkey
Bibliographic Data
| ID | 12705463 |
|---|---|
| Authors | Hakan YILDIRIM (0000-0002-3271-2841, Faculty of Economics, Administrative and Social Sciences, International Logistics and Transportation Istanbul Gelişim University Istanbul Turkey, corresponding author), Andrew Adewale Alola (0000-0001-5355-3707, Faculty of Economics, Administrative and Social Sciences Istanbul Gelisim University Istanbul Turkey, corresponding author), Hakan Eren Şengelen (0000-0002-2079-4720, Business Administration Istanbul Esenyurt University Istanbul Turkey, corresponding author) |
| Year | 2020 |
| Volume | 21 |
| Issue | 1 |
| Publication date | 2020-04-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Public Affairs (JOURNAL) |
| Journal identifiers | ISSN: 1472-3891 • E-ISSN: 1479-1854 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/pa.2142 |
| OpenAlex | W3014314522 |
| Language | EN |
| Citations received | 3 |
| References cited | 20 |
The relevance of gold to the financial market and global economies is responsible for the commodity's (gold) link with financial instruments such as the oil price, currency and gold price, stock index, and other commodities price. In this case, the causal analysis between the interest rate and the gold price has been examined in a novel approach. This study uses the standard Granger causality approach to test the relationship for the economy of Turkey over the period June 1, 2000–June 1, 2017. The results revealed that while gold price depends on daily announcements, demand, and supply, the interest rate depends on some factors such as the monetary policy of the central bank, inflation rate, and different macroeconomic parameters. Thus, the causality between the two financial instruments is observed to be significant. According to the conducted statistical analysis, the interest rate and gold price have interaction between each other. Because there is insufficient evidence in the extant literature that establishes a causality relationship between the two variables, the current study is believed to enhance policy directives and contribute to the financial literature. Considering the peculiar situation of the Turkish financial market, this novel approach presents significant policy directions
Causality (physics · Currency · Econometrics · Economics · Exchange rate · Financial economics · Financial market · Gold as an investment · Granger causality · Inflation (cosmology · Interest rate · Macroeconomics · Monetary economics · Monetary policy · Money supply · Nexus (standard · Energy, Environment, and Transportation Policies · Energy, Environment, Economic Growth · Market Dynamics and Volatility · Finance
| Citations per year | 0.6 |
|---|---|
| Citation span | 2021 - 2021 (1) |
| Highly cited | No |