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Monetary policy in Turkey after Central Bank independence

Author

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  • Gürkaynak, Refet S.
  • Kantur, Zeynep
  • Tas, M. Anil
  • Yildirim, Secil

Abstract

We present an accessible narrative of the Turkish economy since its great 2001 crisis. We broadly survey economic developments and pay particular attention to monetary policy. The data suggests that the Central Bank of Turkey was a strong inflation targeter early in this period but began to pay less attention to inflation after 2009. Loss of the strong nominal anchor is visible in the break we estimate in Taylor-type rules as well as in asset prices. We also argue that recent discrete jumps in Turkish asset prices, especially the exchange value of the lira, are due more to domestic factors. In the post-2009 period the Central Bank was able to stabilize expectations and asset prices when it chose to do so, but this was the exception rather than the rule.

Suggested Citation

  • Gürkaynak, Refet S. & Kantur, Zeynep & Tas, M. Anil & Yildirim, Secil, 2015. "Monetary policy in Turkey after Central Bank independence," CFS Working Paper Series 520, Center for Financial Studies (CFS).
    • Handle: RePEc:zbw:cfswop:520
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    References listed on IDEAS

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    1. Yıldız AKKAYA & Refet S. GÜRKAYNAK, 2012. "Cari açık, bütçe dengesi, finansal istikrar ve para politikası: Heyecanlı bir dönemin izi," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 27(315), pages 93-119.
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    4. Zelal AKTAŞ & Harun ALP & Refet GÜRKAYNAK & Mehtap KESRİYELİ & Musa ORAK, 2009. "Türkiye'de para politikasının aktarımı: Para politikasının mali piyasalara etkisi," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 24(278), pages 9-24.
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    6. Seda KÖYMEN ÖZER & Selin SAYEK BÖKE, 2015. "The Export Performance of Turkey (1996-2013)," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 30(350), pages 93-120.
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    5. Burak Eroglu & Secil Yildirim-Karaman, 2017. "Responses Of Term Structure Of Interest Rates And Asset Prices To Monetary Policy Shocks: Evidence From Turkey," Working Papers 1705, The Center for Financial Studies (CEFIS), Istanbul Bilgi University.
    6. Tiberto, Bruno Pires, 2025. "How does central bank independence influence the relationship between inflation, income inequality and poverty?," Journal of International Money and Finance, Elsevier, vol. 159(C).
    7. Bochun Zhu & Bo?ena Kade?ábková, 2024. "Remarks on financial crisis, speculative bubles and some specifics in the Czech Economy," Proceedings of International Academic Conferences 7109710, International Institute of Social and Economic Sciences.
    8. K. Kývanc Karaman & Seçil Yýldýrým-Karaman, 2017. "The Monetary Policy Change in Turkey in 2009 and Its Implications for Inflation and Growth," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 31(1), pages 1-21.
    9. Daniela Wech, 2015. "Ein Überblick über Funktionen, Entscheidungsstrukturen und Rechenschaftspflichten von Zentralbanken," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 68(22), pages 48-51, November.
    10. Koh,Wee Chian & Yu,Shu, 2020. "A Decade after the 2009 Global Recession : Macroeconomic and Financial Sector Policies," Policy Research Working Paper Series 9289, The World Bank.
    11. Troy Davig & Refet S. Gürkaynak, 2015. "Is Optimal Monetary Policy Always Optimal?," International Journal of Central Banking, International Journal of Central Banking, vol. 11(4), pages 353-382, September.
    12. Temperini, Jacopo & D'Ippoliti, Carlo & Gobbi, Lucio, 2024. "Is the time ripe for helicopter money? Growth impact and financial stability risks of outright monetary transfers," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 24-36.
    13. Kilinc, Mustafa & Tunc, Cengiz, 2019. "The asymmetric effects of monetary policy on economic activity in Turkey," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 505-528.
    14. Yildirim Beyazit Cicen, 2024. "Decoding Inflation: Role of Institutional Quality in Türkiye Using Advanced Econometric Techniques," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 73(74-1), pages 1-35, June.
    15. Furceri, Davide & Loungani, Prakash & Zdzienicka, Aleksandra, 2018. "The effects of monetary policy shocks on inequality," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 168-186.
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    18. Ryu, Hang K. & Slottje, Daniel J., 2017. "Maximum entropy estimation of income distributions from Basmann’s weighted geometric mean measure," Journal of Econometrics, Elsevier, vol. 199(2), pages 221-231.

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    More about this item

    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • 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
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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