Spillovers Between Institutional Interactions Index, Market Risk and Return: Case of Turkey (2007-2020)

One of the key components political stability is relations with institutions, which refers to relationships between government and higher judicial organ, presidency, military bureaucracy, civil bureaucracy independent economic international institutions. The importance institutions for development has been thoroughly discussed by both old new schools institutional economics, who developed theses against Classical Neo-Classical paradigms. In study, we utilized VAR-VECH-TARCH models understand spillover effects our newly introduced Institutional Interaction Index (II), markets returns (BIST 100, FX), risks (CDS). Index, novelty this paper, was obtained from data published daily S. Bilişim. According results especially in long-term exists all variables. study support institutionalist approaches. As deteriorate, BIST100 FX rate volatilities, that is, instability, increases due increase market risks.