Monetary Policy after the Global Crisis
Hakan Kara ()
Atlantic Economic Journal, 2013, vol. 41, issue 1, 51-74
Post-crisis spillovers and heightened capital flows have triggered a search for alternative monetary policy frameworks, especially for small open emerging economies. The Turkish experience since the end of 2010 is an interesting case in this respect. Faced with extreme volatility in cross-border capital flows, rapid credit growth, and a sharp deterioration in the current account deficit, the Central Bank of Turkey (CBT) has modified the conventional inflation targeting regime by adopting financial stability as a supplementary objective and enriching the set of policy instruments. This study explains the underlying motivation behind why the CBT adopted such a flexible policy, provides an overview of the new framework, and summarizes the initial results. The analysis conducted throughout the paper and the recent evidence suggests that the new policy framework has been quite effective in engineering a soft landing of the Turkish economy in the sense that it has successfully shifted the composition of aggregate demand towards a more balanced growth path (rebalancing) without prejudice to the price stability objective. Copyright International Atlantic Economic Society 2013
Keywords: Monetary policy; Price stability; Financial stability; Capital flows; Monetary transmission mechanism; Macro-prudential policy; E44; E52; E58 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:41:y:2013:i:1:p:51-74
Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11293/PS2
Access Statistics for this article
Atlantic Economic Journal is currently edited by Kathleen S. Virgo
More articles in Atlantic Economic Journal from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().