Financialization of Consumer Loans and Aggregate Demand Management

Oluklulu S., Ergül Y. T.

36. Uluslararası Maliye Sempozyumu, Antalya, Turkey, 27 - 30 October 2022, pp.139-140

  • Publication Type: Conference Paper / Summary Text
  • City: Antalya
  • Country: Turkey
  • Page Numbers: pp.139-140
  • Anadolu University Affiliated: Yes


Aggregate demand managment, in terms of public policy, is the goverment's making chamnges in public revenues and expenditures in order to achieve its macroeconomic goals. These changes can also affect the demands of individuals by influencing their incomes. In this study, it is discussed how aggregate demand management is affected by increasing financialization and access to consumer loans. As it is known, financialization has increased in the Turkish economy in parallel with the developments in the world, and new financial instruments have begun to be used. In particular, with the Transition to a Strong Economy Program, the government's borrowing needs have decreased significantly. Financial institutions, especially banks, have turned their attention to consumers, there has been a significant increase in credit cards and consumer loans, and this process continues. In this case, consumers can spend beyond the government's objectives, for example, with a contractionary fiscal policy. In this case, conventional fiscal policy instruments may not be as effective as expected. As a matter of fact, it can be thought that the recent regulations on financial instruments, such as the limitations on credit card installments, have been introduced as a support for conventional policies. In this context, the Turkish case is analyzed within the framework of the changes in household indebtedness after 2001 and the previous period, when consumers' access to credit increased, and their connection with aggregate demand management policies is discussed.