MEASUREMENT OF LIQUIDITY EFFECT FROM THE VIEW OF THE EFFICIENCY OF MONETARY POLICIES IN TURKEY

Burhan Dogan ()
Additional contact information
Burhan Dogan: Anadolu University

Anadolu University Journal of Social Sciences, 2009, vol. 9, issue 1, 99-122

Abstract: When deciding the monetary policies they implement, central banks have to take into account the interaction between the monetary dynamics and the interest rates. Therefore, the investigation of liquidity effect will help which monetary policy tolls should be used in what ways in order to reach the macroeconomic targets of the country in question. This study aims to examine the effectiveness of the monetary program between 1990:1-2007:3 period that the Turkish Central Bank has implemented by measuring the liquidity effect in Turkey, by means of VAR methodology. The model enables us to examine the liquidity effect and not only helps to evaluate the effectiveness of the monetary policy but also examines the relationship between the monetary measures used in the implementation of monetary policies and the other macro variables. . Interest rates were examined in terms of a dynamic response to a shock in monetary policies, currency in circulation, free reserves and different monetary measures like M1 and M2. According to the results of the estimates, the reaction of the interest rates to a shock applied to free reserves and M1 in an increasing trend was negative. When the impact of the monetary shock on the other macro economic variables were examined, theoretical expectations mostly came true.

Keywords: Liquidity Effect; Monetary Policy; Central Bank; Dynamic Response (search for similar items in EconPapers)
JEL-codes: E47 E51 E52 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.anadolu.edu.tr/arastirma/hakemli_dergil ... 009-1/2009_01_06.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:and:journl:v:9:y:2009:i:1:p:99-122

Access Statistics for this article

Anadolu University Journal of Social Sciences is currently edited by Ramazan Geylan

More articles in Anadolu University Journal of Social Sciences from Anadolu University Contact information at EDIRC.
Bibliographic data for series maintained by Social Sciences Institute ( this e-mail address is bad, please contact ).