This paper tests the existence of Gibson paradox using the traditional and modern time series techniques in the case of a developing country, Turkey. Even though the results from the traditional Gibson paradox regression suggested a positive relationship between the interest rates and the prices levels in Turkish data, subsequently it was proven to be spurious. On analyzing the time series properties of the variables and the results from the Johansen cointegration procedure, we reveal that there is no support of the Gibson paradox in Turkish data.

Dr Ferda Halicioglou (2004). The Gibson Paradox: An Empirical Investigation for Turkey, European Research Studies Journal Volume VII Issue 1-2, 111-120