Bölükbaş, Mehmet

This study focused on the effects of monetary and fiscal policy on inflation and the relationship between variables has been examined for the BRIC (Brazil, Russia, India, China) countries and Turkey. In the study, Bootstrap Panel Granger Causality Analysis (The Second Generation Panel Causality Test) method which is developed by Kónya (2006) was used. Firstly the cross-sectional dependeny was investigated among variables, then slope homogeneity test was done. According to the findings of the study, a unidirectional causality relationship has been found from monetary policy to inflation in India and Turkey and there is a bidirectional causality relationship between monetary policy and inflation in China. On the other hand, a unidirectional causality relationship has been found from fiscal policy to inflation in India and whereas there is a unidirectional causality relationship from inflation to fiscal policy in Brazil.