On Determinants of Exchange Market Pressure in Turkey: The Role of Model Uncertainty

Macroeconomic and financial indicators have a significant impact on the exchange market pressure (EMP) in Turkey. Despite huge amount of literature subject, there is no study focusing Turkey that takes into account role model uncertainty pressure. The should be taken consideration, given lack unique theoretical framework markets set numerous explanatory variables. Bayesian averaging (BMA) technique capable determining as to whether any variable included analysis, i.e. models with high posterior probability. To this end, determinants index (EMPI) for period 2010M1-2020M3 are identified using which uncertainty. Model results indicate slope yield curve, domestic credit growth, long term differentials, short-term portfolio flows play rate pressures