Exchange rate versus monetary aggregate targeting: the Turkish case
This article compares and contrasts the macroeconomic effects of exchange rate targeting and money supply targeting by using quarterly data from Turkey for the period February 1986-March 2000. The results of the VAR analysis show that the exchange rate does not have the traditional 'hump-shaped effect' that money supply has on output. In addition, we observe that an exchange rate depreciation leads to a temporary improvement in the trade balance for only a year, while monetary innovations have longer-lasting effects. Those results suggest that money-based targeting is more appropriate than exchange-rate targeting for Turkey.
Volume (Year): 41 (2009)
Issue (Month): 16 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RAEC20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RAEC20|
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.:
- Guillermo A. Calvo & Carlos A. Végh, 1994. "Inflation Stabilization And Nominal Anchors," Contemporary Economic Policy, Western Economic Association International, vol. 12(2), pages 35-45, 04.
- U. Ozlale & E. Yeldan, 2004. "Measuring exchange rate misalignment in Turkey," Applied Economics, Taylor & Francis Journals, vol. 36(16), pages 1839-1849.
- Koray, Faik & McMillin, W. Douglas, 1999. "Monetary shocks, the exchange rate, and the trade balance," Journal of International Money and Finance, Elsevier, vol. 18(6), pages 925-940, December.
- Vuslat Us, 2004. "Monetary transmission mechanism in Turkey under the monetary conditions index: an alternative policy rule," Applied Economics, Taylor & Francis Journals, vol. 36(9), pages 967-976.
- Leo Bonato & Andreas Billmeier, 2002.
"Exchange Rate Pass-Through and Monetary Policy in Croatia,"
IMF Working Papers
02/109, International Monetary Fund.
- Billmeier, Andreas & Bonato, Leo, 2004. "Exchange rate pass-through and monetary policy in Croatia," Journal of Comparative Economics, Elsevier, vol. 32(3), pages 426-444, September.
- Kilian, Lutz, 2001. "Impulse Response Analysis in Vector Autoregressions with Unknown Lag Order," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 20(3), pages 161-79, April.
- Kiguel, Miguel A & Liviatan, Nissan, 1992. "The Business Cycle Associated.with Exchange Rate-Based Stabilizations," World Bank Economic Review, World Bank Group, vol. 6(2), pages 279-305, May.
- A. Javier Hamann, 1999.
"Exchange-Rate-Based Stabilization; A Critical Look at the Stylized Facts,"
IMF Working Papers
99/132, International Monetary Fund.
- By A. Javier Hamann, 2001. "Exchange-Rate-Based Stabilization: A Critical Look at the Stylized Facts," IMF Staff Papers, Palgrave Macmillan, vol. 48(1), pages 4.
- Mishkin, Frederic S, 1998. "The Dangers of Exchange-Rate Pegging in Emerging-Market Countries," International Finance, Wiley Blackwell, vol. 1(1), pages 81-101, October.
- Reinhart, Carmen & Vegh, Carlos, 1995.
"Nominal interest rates, consumption booms, and lack of credibility: A quantitative examination,"
13898, University Library of Munich, Germany.
- Reinhart, Carmen M. & Vegh, Carlos A., 1995. "Nominal interest rates, consumption booms, and lack of credibility: A quantitative examination," Journal of Development Economics, Elsevier, vol. 46(2), pages 357-378, April.
- Sims, Christopher A, 1980. "Macroeconomics and Reality," Econometrica, Econometric Society, vol. 48(1), pages 1-48, January.
- Martin Uribe, 1995.
"Exchange-rate based inflation stabilization: the initial real effects of credible plans,"
International Finance Discussion Papers
503, Board of Governors of the Federal Reserve System (U.S.).
- Uribe, Martin, 1997. "Exchange-rate-based inflation stabilization: The initial real effects of credible plans," Journal of Monetary Economics, Elsevier, vol. 39(2), pages 197-221, July.
When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:41:y:2009:i:16:p:2085-2092. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.