The Interest Rate Channel in Turkey: An Investigation with Kalman Filter Approach

Taha Bahadir Sarac and Okyay Ucan
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Taha Bahadir Sarac: Department of Economics,Faculty of Economics and Administrative Sciences, Nigde University, Turkey

International Journal of Economics and Financial Issues, 2013, vol. 3, issue 4, 874 - 884

Abstract: The monetary authority affects the aggregate demand and investment expenditure via controlling short run interest rates. It is important to satisfy the price stability together with working interest rate channel. This study aims to investigate the validity of interest rate channel in Turkey since the inflation targeting period starting with the year 2002. The sample period covers quarterly data from 1990:1 to 2011:3. It is stated that after the 2002 efficiency of interest rate channel increases.

Keywords: Kalman Filter; Markov Switching; Monetary Policy; Turkey (search for similar items in EconPapers)
JEL-codes: C32 C34 E52 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2013-04-9

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