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The Taylor Rule in Estimating the Performance of Inflation Targeting Programs: The Case of Turkey


  • Erdem Ekrem

    () (Erciyes University)

  • Kayhan Selim

    () (Bozok University)


In this study, we aim to analyse the performance of inflation targeting program named A Transition Program into a Powerful Economy in particular since 2002 until the end of 2009 by using Taylor rule in a different way. We divide inflation targeting period in accordance with the governors of the CBRT, Sureyya Serdengecti and Durmus Yilmaz, as a most important element that affects inflation targeting program among other factors.Results imply that Mr. Serdengecti did not follow a pure Taylor rule while Mr. Yilmaz does. In Serdengecti period, the CBRT does not take in account output gap movements and exchange rate while deciding short term interest rate as said in Taylor rule. But the CBRT takes into account outgap movements and exchange rate movements in Yilmaz period, and these variables have important portion in discussing of short term interest rate while it is not so necessary in Serdengecti period.

Suggested Citation

  • Erdem Ekrem & Kayhan Selim, 2011. "The Taylor Rule in Estimating the Performance of Inflation Targeting Programs: The Case of Turkey," Global Economy Journal, De Gruyter, vol. 11(1), pages 1-17, March.
  • Handle: RePEc:bpj:glecon:v:11:y:2011:i:1:n:7

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    References listed on IDEAS

    1. Horvath Roman & Rusnak Marek, 2009. "How Important Are Foreign Shocks in a Small Open Economy? The Case of Slovakia," Global Economy Journal, De Gruyter, vol. 9(1), pages 1-17, March.
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    4. Hilde C. Bjørnland & Jørn I. Halvorsen, 2014. "How does Monetary Policy Respond to Exchange Rate Movements? New International Evidence," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 76(2), pages 208-232, April.
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    6. Mehtap Kesriyeli & Cihan Yalcin, 1998. "Taylor Kurali ve Turkiye Uygulamasi Uzerine Bir Not," Discussion Papers 9802, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    7. Sergi Bruno S. & Hsing Yu, 2010. "Responses of Monetary Policy to Inflation, the Output Gap, and Real Exchange Rates: The Case of Australia, Canada, and New Zealand," Global Economy Journal, De Gruyter, vol. 10(2), pages 1-11, May.
    8. John B. Taylor, 2001. "The Role of the Exchange Rate in Monetary-Policy Rules," American Economic Review, American Economic Association, vol. 91(2), pages 263-267, May.
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