Abstract
This paper proposes a specification to identify the monetary policy for a small open economy, Turkey. The monetary policy is measured by using the spread between the Central Bank?s interbank interest rate and the depreciation rate of the domestic currency. A VAR type of model is used to identify monetary policy covering the period 1986:05-2000:10. The results suggest that tight monetary policy has a transitory effect on output but a permanent effect on prices. This specification is free of some puzzles such as the price puzzle and the liquidity puzzle that hampered some of the previous studies.
Article Details
- Year: 2008
- Volume: 29
- Issue: 1
- Accepted: 01.12.2007
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How to Cite?
Hakan Berument, N. Nergiz Dincer (2008). Measuring the Effects of Monetary Policy for Turkey. Journal of Economic Cooperation and Development, 29(1), -.
