The Stock Returns, Inflation and Growth Relationships in Turkey: Wavelet Coherence Analysis

Abstract

The efficient functioning of stock market is crucial for economic stability. Economic growth , inflation, the essential elements of economic stability, may steer stock returns. The aim of the study is to determine whether stock returns are safe haven against inflation as an investment tool in Turkey , to reveal its relationship with economic growth. The impacts of both inflation and economic growth on stock returns may exhibit periodical changes in different directions. The changes between 2008-2022 are tested with the wavelet coherence analysis method by various theoretical and empirical perspectives for the purpose of the study. Upon considering the findings, stock returns, as safe haven against inflation, are determined to interact with economic growth.