Monetary policy rules in practice: Re-examining the case of Turkey
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Date
2008
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Elsevier Science
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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
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Keywords
Monetary Policy, Spread, Reaction Function, Nonlinearity, Asymmetry
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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
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Source
Physica A-Statistical Mechanics And Its Applications
Volume
387
Issue
16-17
Start Page
4309
End Page
4318