Research Article


DOI :10.26650/ISTJECON2021-1191952   IUP :10.26650/ISTJECON2021-1191952    Full Text (PDF)

Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye

Murat ErenSelim BaşarBengü Tosun

In this study, developed from the importance of the deformation caused by dollarization in developing countries, the effect of risk level on financial dollarization is examined. In the research conducted for Turkey, one of the riskiest countries in the world according to the five-year Credit Default Swaps (CDS) premium values as of the date of the study, weekly data between the period of December 14, 2012 and February 11, 2022 are used to determine the effect of the risk level for short periods. The relationship between variables is examined using the Fourier Cointegration Test (FSHIN) cointegration test and the Dynamic Least Squares (DOLS) estimator. The findings show that country risk, exchange rate, and domestic currency deposit interest rates affect financial dollarization positively, while foreign currency deposit interest rates affect it negatively. The study carried out for Turkey sheds light on the factors that should be considered in high-risk countries facing the dollarization problem and presents policy recommendations for developing countries in this direction.

JEL Classification : C32 , E43 , E52 , E58

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APA

Eren, M., Başar, S., & Tosun, B. (2022). Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye. Istanbul Journal of Economics, 72(2), 625-651. https://doi.org/10.26650/ISTJECON2021-1191952


AMA

Eren M, Başar S, Tosun B. Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye. Istanbul Journal of Economics. 2022;72(2):625-651. https://doi.org/10.26650/ISTJECON2021-1191952


ABNT

Eren, M.; Başar, S.; Tosun, B. Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye. Istanbul Journal of Economics, [Publisher Location], v. 72, n. 2, p. 625-651, 2022.


Chicago: Author-Date Style

Eren, Murat, and Selim Başar and Bengü Tosun. 2022. “Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye.” Istanbul Journal of Economics 72, no. 2: 625-651. https://doi.org/10.26650/ISTJECON2021-1191952


Chicago: Humanities Style

Eren, Murat, and Selim Başar and Bengü Tosun. Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye.” Istanbul Journal of Economics 72, no. 2 (May. 2024): 625-651. https://doi.org/10.26650/ISTJECON2021-1191952


Harvard: Australian Style

Eren, M & Başar, S & Tosun, B 2022, 'Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye', Istanbul Journal of Economics, vol. 72, no. 2, pp. 625-651, viewed 18 May. 2024, https://doi.org/10.26650/ISTJECON2021-1191952


Harvard: Author-Date Style

Eren, M. and Başar, S. and Tosun, B. (2022) ‘Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye’, Istanbul Journal of Economics, 72(2), pp. 625-651. https://doi.org/10.26650/ISTJECON2021-1191952 (18 May. 2024).


MLA

Eren, Murat, and Selim Başar and Bengü Tosun. Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye.” Istanbul Journal of Economics, vol. 72, no. 2, 2022, pp. 625-651. [Database Container], https://doi.org/10.26650/ISTJECON2021-1191952


Vancouver

Eren M, Başar S, Tosun B. Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye. Istanbul Journal of Economics [Internet]. 18 May. 2024 [cited 18 May. 2024];72(2):625-651. Available from: https://doi.org/10.26650/ISTJECON2021-1191952 doi: 10.26650/ISTJECON2021-1191952


ISNAD

Eren, Murat - Başar, Selim - Tosun, Bengü. Dollarization and Risk Premium in a Risky Country: An Investigation on Turkiye”. Istanbul Journal of Economics 72/2 (May. 2024): 625-651. https://doi.org/10.26650/ISTJECON2021-1191952



TIMELINE


Submitted20.10.2022
Accepted05.12.2022
Published Online30.12.2022

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