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dc.contributor.authorDağlaroğlu, T.en_US
dc.contributor.authorDemirel, B.en_US
dc.contributor.authorMahmud, S. F.en_US
dc.date.accessioned2019-02-21T16:09:57Z
dc.date.available2019-02-21T16:09:57Z
dc.date.issued2018en_US
dc.identifier.issn0340-8744
dc.identifier.urihttp://hdl.handle.net/11693/50484
dc.description.abstractThe advent of global financial crisis in 2008, unleashed volatile short term capital flows to the emerging markets. This has forced many central banks in the developing world to adopt innovative policy measures to address concerns related to financial instability caused by the volatile nature of capital flows. In 2010 Turkish Central Bank included financial stability in addition to price stability as one of primary goals of its monetary policy. Several macro-prudential measures had been taken and ‘corridor system’ of setting the short-term policy rates had been introduced. In this paper, we have estimated an extended Taylor rule, using error correction model, to examine the impact of global financial factors in impacting the setting up of the policy rate in the pre and post 2010 periods in Turkey. It has been found that in the post-2010 period, global financial factors and monetary policy stance of the core economy, USA, have become major factor(s) in shaping up the monetary policy. Particularly our results of variance decomposition show that global financial indicators such as, VIX and EMBI have taken prominence in the setting of the short-term policy rate. This has not only made the domestic monetary more dependent on external factors but has also made pro-cyclical in nature.
dc.language.isoEnglish
dc.source.titleEmpiricaen_US
dc.relation.isversionofhttps://doi.org/10.1007/s10663-017-9388-0
dc.subjectFinancial stabilityen_US
dc.subjectInflation targetingen_US
dc.subjectMonetary policyen_US
dc.subjectShort-term capital flowsen_US
dc.subjectTaylor ruleen_US
dc.subjectVector autoregression modelen_US
dc.titleMonetary policy implications of short-term capital flows in Turkeyen_US
dc.typeArticleen_US
dc.departmentDepartment of Economicsen_US
dc.citation.spage747en_US
dc.citation.epage763en_US
dc.citation.volumeNumber45en_US
dc.citation.issueNumber4en_US
dc.identifier.doi10.1007/s10663-017-9388-0
dc.publisherSpringer New York LLC
dc.identifier.eissn1573-6911en_US


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