Browsing by Subject "Interest rate spreads"

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    An interest-rate-spread-based measure of Turkish monetary policy
    (Routledge, 2014) Berument, Hakan; Ceylan, N. B.; Dogan, B.
    A coherent method to measure the effectiveness of a monetary policy improves the monetary authority's management capacity and renders the possibility of applying sound policies prior to and during a crisis. The trend in employing complicated and ambiguity-bearing unconventional monetary tools in the aftermath of the 2008 crisis has increased the value of such a method. The aim of this article is to introduce a coherent and consistent monetary policy evaluation method for Turkey. Accordingly, we suggest that innovations in the spread between overnight interest rates and Treasury auction interest rates are informative for exchange rate, output, and prices. Empirical evidence for this identification reveals that positive innovation in spread (implying a tight monetary policy measure) decreases output temporarily, permanently decreases prices, and appreciates local currency. This result is also robust to alternative specifications.
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    ItemOpen Access
    Measuring monetary policy for a small open economy: Turkey
    (Elsevier BV, 2007) Berument, Hakan
    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.