Eurozone Crisis Spillovers on an Emerging Economy: Evidence from Turkey
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描述
This paper empirically investigates the spillovers of the recent Eurozone crisis through stock markets on an emerging market economy. We focus on the dynamic co-movements across the stock markets of Turkey with GIPSI (Greece, Ireland, Portugal, Spain, Italy) and core countries (Germany, France and UK). The findings suggest that Turkey has suffered from the Euro crisis with a more impact felt via the core countries that have strong trade and financial linkages. The Euro crisis has also changed the structure of the evolution of dynamic correlations that may be linked to changing expectations. These results imply high sensitivity of the economy to external factors requiring long-term policies to strengthen its macroeconomic fundamentals.