THE IMPACT OF FINANCIAL FACTORS ON MONETARY POLICY RESPONSES IN EMERGING MARKET ECONOMIES

dc.contributor.authorIlhan, Ali
dc.date.accessioned2024-10-29T17:59:45Z
dc.date.available2024-10-29T17:59:45Z
dc.date.issued2023
dc.departmentTekirdağ Namık Kemal Üniversitesi
dc.description.abstractPurpose: This study investigates the monetary policy responses of emerging market inflation targeters to financial factors both before and after the 2008 global financial crisis (GFC).Methodology: Taylor rules, augmented with the nominal exchange rate, the exchange market pressure index, and the U.S. federal funds eff ective rate, are analyzed by using the augmented mean group (AMG) panel estimator for 12 emerging market economies (EMEs) that adopted an infl ation targeting regime. The sample is divided into two periods around the GFC: 2002Q1-2007Q4 and 2010Q1-2019Q4. Results: Infl ation signifi cantly and positively impacted interest rate settings during both periods. The panel AMG results indicate that the EMEs' responses to financial variables only had a signifi cant eff ect during the post-crisis period, while the federal funds eff ective rate had the most impact among the financial variables. The country-specifi c results indicate that some central banks also reacted to financial variables before the GFC.Conclusion: Inflation played an important role in policy rate decisions for both periods despite the slightly decreasing weight in interest rate settings after the GFC due to the increasing influence of financial variables. Although financial variables were important in setting interest rates during both periods, the EMEs' post-GFC monetary policies focused more on financial stability. Furthermore, their monetary policies became more compatible with external financial conditions after the GFC.
dc.identifier.doi10.51680/ev.36.2.3
dc.identifier.endpage268
dc.identifier.issn0353-359X
dc.identifier.issn1847-2206
dc.identifier.issue2en_US
dc.identifier.startpage255
dc.identifier.urihttps://doi.org/10.51680/ev.36.2.3
dc.identifier.urihttps://hdl.handle.net/20.500.11776/14828
dc.identifier.volume36
dc.identifier.wosWOS:001136653500001
dc.identifier.wosqualityN/A
dc.indekslendigikaynakWeb of Science
dc.language.isoen
dc.publisherSveuciliste Josipa Jurja Strossmayera & Osijeku, Ekonomski Fak
dc.relation.ispartofEkonomski Vjesnik
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectEmerging market economies
dc.subjectfinancial stability
dc.subjectmonetary policy
dc.subjectpanel AMG
dc.subjectTaylor rule
dc.titleTHE IMPACT OF FINANCIAL FACTORS ON MONETARY POLICY RESPONSES IN EMERGING MARKET ECONOMIES
dc.typeArticle

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