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Identifying the Liquidity Effects of Monetary Policy Shocks for a Small Open Economy: Turkey

  • M. Berument

    ()

  • Selahattin Togay

    ()

  • Afsin Sahin

    ()

This paper proposes a new liquidity measure for a small open economy. The new measure includes the net liquidity provided to the system by a central bank after accounting for the central bank’s involvement in the foreign exchange market. Empirical evidence gathered from Turkey suggests that a positive innovation in liquidity increases output temporarily and that its effect on prices, exchange rate and money are permanently higher.

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File URL: http://hdl.handle.net/10.1007/s11079-009-9164-2
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 22 (2011)
Issue (Month): 4 (September)
Pages: 649-667

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Handle: RePEc:kap:openec:v:22:y:2011:i:4:p:649-667
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100323

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