Capital Flows under Global Uncertainties: Evidence from Turkey

Oğuzhan Cepni*, Mehmet Selman Çolak, Yavuz Selim Hacıhasanoğlu, Muhammed Hasan Yılmaz

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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This paper investigates the effects of global economic uncertainty and trade policy–related uncertainty in the US in predicting the bond and equity flows to Turkey during the period from January 2008 to November 2019. We use the time-varying Granger-causality test to assess the ability of economic policy uncertainty and capital flows to forecast Turkish equity and bond markets using fund-level data on bond and equity inflows compiled by the Emerging Portfolio Fund Research (EPFR) global database. Although we found no evidence of causality in the standard Granger-causality test, the time-varying robust causality test detects significant episodes that imply a causal relationship between capital flows and uncertainty indexes, especially during the global financial crisis and the election of the Trump administration.
Original languageEnglish
JournalBorsa Istanbul Review
Issue number2
Pages (from-to)175-185
Number of pages11
Publication statusPublished - Jun 2021

Bibliographical note

Published online: 6 October 2020.


  • Capital flows
  • Global economic policy uncertainty
  • Time-varying multivariate causality
  • Trade policy uncertainty in the United States

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