Effectiveness of Monetary Policy: Evidence from Turkey

摘要: An effective monetary policy framework is often viewed as a pre-condition for well-functioning financial markets. Yet measuring effectiveness not straightforward; it requires empirical work to understand the impact of infrastructure, competitiveness markets, and current economic conditions. In particular, depends on extent which chosen interest rate affects all other prices—including entire term structure rates, credit exchange asset prices. This paper examines in Turkey by focusing pass-through outcomes way an interacted vector autoregressive (IVAR) approach. The results suggest that policy-led changes are fully transmitted deposit rates within eight months. Competition banking sector (as well sector’s liquidity profitability), dollarization, flexibility, inflation, have positive effect pass-through; whereas regulatory quality, GDP growth, industrial capital inflows negative effect. Using various tests, we find development macroeconomic variables neither robust nor time-invariant.