This study attempts to analyse the causal relations between bank money and credit channel for Islamic and conventional banking in Malaysia and Turkey on a comparative level. Monthly data for the period from January 2007 to May 2013 is used for the Granger causality analysis. The findings show that in the case of bank money, the causality is from deposits to loans (financing) for Islamic banks in both countries. In addition, although causality is determined from money supply to loans in conventional banking in both countries, the same causality in Islamic banking is only identified in the case of Malaysia. Furthermore, in the causal relationship between bank deposits and money supply, causality is only found from money supply to deposits in both banking types in the case of Turkey. These results suggest that the credit channel may only operate over commercial banking in both countries and that it also only works over Islamic banking in Malaysia.
A general definition of causality is introduced and then specialized to become operational. By considering simple examples a number of advantages, and also difficulties, with the definition are discussed. Tests based on the definitions are then considered and the use of post-sample data emphasized, rather than relying on the same data to fit a model and use it to test causality. It is suggested that a bayesian viewpoint should be taken in interpreting the results of these tests. Finally, the results of a study relating advertising and consumption are briefly presented.
Berzelius failed to make use of Faraday's electrochemical laws in his laborious determination of equivalent weights.