Testing Quantity Theory of Money for the Turkish Economy

In this paper, it is tried to test the main assumptions of the Quantity Theory of Mo-ney for the Turkish economy. Using some contemporaneous estimation techniques to examine the long-run stationary economic relationships on which the quantity the-ory is constructed, it is found that stationary characteristics of the velocitities of nar-rowly and broadly defined monetary aggregates cannot be rejected. However, mone-tary aggregates seem to be endogenous for the long-run evoluation of prices and re-al income. It is concluded that monetary authorities follow an accommodative mone-tary policy inside the period given the endogeneity of the monetary variables