NDLI: Taylor Rule in Practice: Evidence from Turkey

Content Provider	Springer Nature Link
Author	Adanur Aklan, Nejla Nargelecekenler, Mehmet
Copyright Year	2008
Abstract	This paper estimates the backward-looking and forward-looking monetary policy reaction functions of the Central Bank of the Republic of Turkey (CBRT) by considering the post-crisis period from August 2001 to September 2006, with a special emphasis on inflation targeting. Policies which the CBRT applied are analyzed according to the Taylor rule. The empirical results indicate that the CBRT followed the Taylor rule in its interest setting behaviour. In forward-looking models, the response coefficient of inflation and the output gap is greater than that of backward-looking models. The results of forward-looking models reflect, the policies conducted in Turkey. In the post-crisis period, expected inflation has been the main reaction variable for the CBRT. This suggests that monetary policy over the post-crisis period was not accommodating increases in expected inflation. The main conclusion is that ‘Taylor rule’ based monetary policies were effective in inflation targeting in Turkey.
Starting Page	156
Ending Page	166
Page Count	11
File Format	PDF
ISSN	10830898
Journal	International Advances in Economic Research
Volume Number	14
Issue Number	2
e-ISSN	1573966X
Language	English
Publisher	Springer US
Publisher Date	2008-03-05
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Money and Interest Rates: General Turkey Inflation targeting Taylor rule Monetary policy Reaction function GMM Economic Growth Microeconomics International Economics Macroeconomics/Monetary Economics Economics general
Content Type	Text
Resource Type	Article
Subject	Economics and Econometrics

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