The Effects of financial conditions on time and saving deposits a case study of Turkey

Abstract

The purpose of this paper is to indicate, in the light of the past and recent trends, the areas and scope for domestic policy action for improving the process of domestic resource mobilization. This paper focuses on the quantifiable determinants of saving and analyses the effects of financial conditions on the volume of time and saving deposits and presents an emprical test of models of finance in economic development, developed by McKinnon-Shaw (1973) and Maxwell Fry (1978). The first chapter of the book provides an introduction to the problem and explains my aim briefly. The second part of the book is the review of the literature and it consists of the Keynesian type saving function, the life-cycle hypothesis of saving, the McKinnon-Shaw model, Van Wijnbergen and Taylor models. IllIn the third chapter of the book Fry's saving function specified for econometric estimations is described in more detail and the result of these estimations for seven and fourteen Asian developing countries are given. In the fourth chapter, the economic performance of Turkey is summarized over the period 1963-1988. The fifth chapter represents my own model which is based on Fry's saving function; this chapter presents the result of the time series analysis, using quarterly observations over the period 1963-88. The sixth chapter covers empirical tests for interest rate liberalization for the subperiods 1970.1-1988.4 and 1980.1- 1988.4. Chapter seven is the last chapter and it provides a conclusion and gives suggestions for further research. IV