Identfying the liquidity effects of monetary policy shocks for a small open economy: Turkey

Date
2011
Advisor
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Instructor
Source Title
Open Economies Review
Print ISSN
0923-7992
Electronic ISSN
1573-708X
Publisher
Springer New York LLC
Volume
22
Issue
4
Pages
649 - 667
Language
English
Type
Article
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Journal ISSN
Volume Title
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Abstract

This paper proposes a new liquidity measure for a small open economy. The new measure includes the net liquidity provided to the system by a central bank after accounting for the central bank's involvement in the foreign exchange market. Empirical evidence gathered from Turkey suggests that a positive innovation in liquidity increases output temporarily and that its effect on prices, exchange rate and money are permanently higher.

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Book Title
Keywords
Liquidity effect, Open economy version of NBR, Small and open economies, VAR models
Citation
Published Version (Please cite this version)