Examining the effect of credit on monetary policy with Markov regime switching: Evidence from Turkey
Yükleniyor...
Dosyalar
Tarih
2022
Yazarlar
Dergi Başlığı
Dergi ISSN
Cilt Başlığı
Yayıncı
Sciendo
Erişim Hakkı
info:eu-repo/semantics/openAccess
Özet
This paper analyses the effect of credit on monetary policy responses for different regimes in Turkey. To do so, the Taylor rule augmented with the credit gap is estimated by using a Markov regime switching model from January 2006 to December 2019. The empirical findings identify two regimes: the low- and high-interest rate regimes. The prevalence of the former indicates policy authorities' growth priorities. Furthermore, differing responses across the regimes reflect that the Central Bank of the Republic of Turkey has an asymmetric policy stance. In the low-interest rate regime, the monetary policy only significantly responds to inflation. In the high-interest rate regime, both inflation and credit have significant positive impacts on interest rate setting. This indicates that credit conditions affected the tightening of the monetary policy stance in Turkey despite the use of macroprudential tools after the global financial crisis.
Açıklama
Anahtar Kelimeler
credit, financial stability, monetary policy, macroprudential policy, Markov regime switching, Turkey, Financial Stability, Exchange-Rate, Central Bank, Rules, Inflation, Pressure, Crises
Kaynak
Economics And Business Review
WoS Q Değeri
N/A
Scopus Q Değeri
Q4
Cilt
8
Sayı
4
