Monetary policy rules in practice: Re-examining the case of Turkey
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Date
2008-07-01
Authors
Hasanov, Mübariz
Omay, Tolga
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier Science
Abstract
This paper investigates possible asymmetries in the monetary policy reaction function of the Central Bank of Republic of Turkey over the business cycles. It is found that the bank reacted more aggressively towards output stabilisation during recessions than expansions. The empirical evidence suggests that the inflation targeting policy of the Turkish Central Bank was accommodative rather than stabilising. Furthermore, it is found that although the Central Bank of Republic of Turkey responded to foreign reserves, real exchange rates and short-term capital inflows both in expansion and recession periods, the bank targeted money growth, budget deficits, and net foreign assets only in expansion periods
Description
Keywords
Monetary Policy, Spread, Reaction Function, Nonlinearity, Asymmetry
Citation
Hasanov, M., Omay, T. (2008). Monetary policy rules in practice: Re-examining the case of Turkey. Physica A-Statistical Mechanics And Its Applications, 387(16-17), 4309-4318. http://dx.doi.org/10.1016/j.physa.2008.02.075