Measuring Monetary Policy for a Small Open Economy: Turkey
Date Issued
2007-06Author
Berument, H.
Please cite this item using this persistent URL
http://hdl.handle.net/11693/11573Journal
Journal of Macroeconomics
Published as
http://dx.doi.org/10.1016/j.jmacro.2006.02.001Collections
- Department of Economics [152]
Publisher
Elsevier
Abstract
This paper proposes a measure to assess the monetary policy for a highly inflationary small open economy: Turkey. The empirical evidence suggests that positive innovations in the spread between the Central Bank's interbank interest rate and the depreciation rate of the local currency mimic the properties of the tight monetary policy. These innovations, when they are positive, decrease income and prices, and appreciate the local currency. For prices and the exchange rate, the effects are permanent; but for income the effect is transitory. (c) 2007 Elsevier Inc. All rights reserved.
Citation
Berument, H. (2007). Measuring monetary policy for a small open economy: Turkey. Journal of Macroeconomics, 29(2), 411-430.