The monetary transmission mechanism in Turkey : New developments
AbstractThe objective of this paper is to study the changes in the monetary policy transmission mechanism in Turkey. The analysis hinges upon both qualitative and quantitative evidence regarding various channels of monetary policy transmission. The arguments about the extent of the exchange rate, interest rate, asset price, credit and expectations channel are based on various studies conducted especially in the aftermath of the February 2001 financial crisis. The paper asserts that the interest rate and the credit channel have an increasingly visible effect on economic activity, while the prominence of the exchange rate channel tends to attenuate in the post-crisis period thanks to prudent fiscal policies and the start of the inflation-targeting regime under floating exchange rates. Furthermore, the improvements in the communication policy increased the ability of the Central Bank of Turkey in managing expectations along with an enhanced credibility.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 0704.
Date of creation: 2007
Date of revision:
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Other versions of this item:
- Erdem Basci & Özgür Özel & Cagri Sarikaya, 2008. "The monetary transmission mechanism in Turkey: new developments," BIS Papers chapters, in: Bank for International Settlements (ed.), Transmission mechanisms for monetary policy in emerging market economies, volume 35, pages 475-499 Bank for International Settlements.
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-30 (All new papers)
- NEP-CBA-2007-06-30 (Central Banking)
- NEP-MAC-2007-06-30 (Macroeconomics)
- NEP-MON-2007-06-30 (Monetary Economics)
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