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Describing of central banks’ monetary policy in the context to linear and nonlinear taylor rule: the case of Turkey

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  • utku altunöz

    (Sinop University)

Abstract

This study analyzes whether the original and expanded Taylor rules are valid in determining policy interest rates, which are used as the main instrument of monetary policy by the Central Bank of the Republic of Turkey (CBRT), which has adopted the inflation targeting regime. In this context, the validity of the original and extended Taylor rules for the 2000–2020 period is analyzed econometrically within the scope of linear and nonlinear time series analysis. According to the results obtained, the Taylor rule is valid in the analysis periods with respect to inflation, production, and foreign currency shortage. These results show that monetary policy strategies are designed within the original and expanded Taylor rules and that money market policy interest rates are determined by considering the changes in inflation, production, and foreign currency shortage.

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  • utku altunöz, 2022. "Describing of central banks’ monetary policy in the context to linear and nonlinear taylor rule: the case of Turkey," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4641-4662, December.
    • Handle: RePEc:spr:qualqt:v:56:y:2022:i:6:d:10.1007_s11135-022-01329-5
    DOI: 10.1007/s11135-022-01329-5
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    More about this item

    Keywords

    Taylor rule; Monetary policy; ARDL; NARDL;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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