A Monetary Disequilibrium Model for Turkey : Investigation of a Disinflationary Fiscal Rule and its Implications on Monetary Policy
AbstractIn this paper we present a monetary disequilibrium model based on Khan and Knight’s framework, estimate it for the Turkish economy and run several simulation experiments. The simulation results show the importance of fiscal discipline to achieve the objectives such as to sustain the disinflation process and to reduce the high budget deficit in Turkey. In the long term perspective, however, we conclude that tight fiscal policies should be mixed with either monetary or debt management policy to avoid the excessive monetary contraction as the real demand for broad money increases with the disinflation process.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 0507.
Date of creation: 2005
Date of revision:
Contact details of provider:
Postal: Head Office, Istiklal Cad. 10 Ulus, 06100 Ankara
Phone: (90 312) 507 5000
Fax: (90 312) 507 5640
Web page: http://www.tcmb.gov.tr
More information through EDIRC
Other versions of this item:
- Özdemir, K. Azim & Turner, Paul, 2008. "A Monetary Disequilibrium Model for Turkey: Investigation of a Disinflationary Fiscal Rule and its Implications for Monetary Policy," Journal of Policy Modeling, Elsevier, vol. 30(2), pages 349-361.
- NEP-ALL-2006-01-01 (All new papers)
- NEP-CBA-2006-01-01 (Central Banking)
- NEP-CWA-2006-01-01 (Central & Western Asia)
- NEP-MAC-2006-01-01 (Macroeconomics)
- NEP-MON-2006-01-01 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Metin, Kivilcim, 1998. "The Relationship between Inflation and the Budget Deficit in Turkey," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(4), pages 412-22, October.
- Sassanpour, Cyrus & Sheen, Jeffrey, 1984. "An empirical analysis of the effect of monetary disequilibria in open economies," Journal of Monetary Economics, Elsevier, vol. 13(1), pages 127-163, January.
- Mohsin S. Khan & Malcolm D. Knight, 1981. "Stabilization Programs in Developing Countries: A Formal Framework (Programmes de stabilisation dans les pays en dÃ©veloppement: cadre formel) (Programas de estabilizaciÃ³n en los paÃses en des," IMF Staff Papers, Palgrave Macmillan, vol. 28(1), pages 1-53, March.
- Ozatay, Fatih, 1997. "Sustainability of fiscal deficits, monetary policy, and inflation stabilization: The case of Turkey," Journal of Policy Modeling, Elsevier, vol. 19(6), pages 661-681, December.
- Ayca Tekin-Koru & Erdal Ozmen, 2003. "Budget deficits, money growth and inflation: the Turkish evidence," Applied Economics, Taylor & Francis Journals, vol. 35(5), pages 591-596.
- Sundararajan, V., 1986. "Exchange rate versus credit policy : Analysis with a monetary model of trade and inflation in India," Journal of Development Economics, Elsevier, vol. 20(1), pages 75-105.
- Leslie Lipschitz, 1984. "Domestic Credit and Exchange Rates in Developing Countries: Some Policy Experiments with Korean Data (CrÃ©dit intÃ©rieur et taux de change dans les pays en dÃ©veloppement: quelques expÃ©rience," IMF Staff Papers, Palgrave Macmillan, vol. 31(4), pages 595-635, December.
- Blejer, Mario I & Leiderman, Leonardo, 1981. "A Monetary Approach to the Crawling-Peg System: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 89(1), pages 132-51, February.
- Erdal Ozmen, 1998. "Is currency seigniorage exogenous for inflation tax in Turkey?," Applied Economics, Taylor & Francis Journals, vol. 30(4), pages 545-552.
- Pierre-Richard AgÃ©nor, 1990. "Stabilization Policies in Developing Countries with a Parallel Market for Foreign Exchange," IMF Working Papers 90/16, International Monetary Fund.
- Ozatay, Fatih, 2000. "A quarterly macroeconometric model for a highly inflationary and indebted country: Turkey," Economic Modelling, Elsevier, vol. 17(1), pages 1-11, January.
- Levent Korap, 2006. "An Analysis of Central Bank Interventions on Forex Market For The Post-Crisis Period," Working Papers 2006/4, Turkish Economic Association.
- Günçavdi, Öner & Küçük, Ali Erhan, 2013. "Investment expenditure and capital accumulation in an inflationary environment: The case of Turkey," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 554-571.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gulhanim Kayatas).
If references are entirely missing, you can add them using this form.