A Quarterly Macroeconometric Model of the Turkish Economy

Cem Aysoy and Ahmet N. Kipici

Central Bank Review, 2005, vol. 5, issue 2, 39-71

Abstract: This paper aims at describing a small-scale quarterly model for the Turkish economy. It differs from previous work in two respects; (i) the explicit treatment of the expectations in the inflationary process; (ii) the effect of public borrowing on inflation via interest rates. We conclude that expectations have the greatest importance in the determination of inflation along with the exchange rate in Turkey. In addition, to use the overnight interest rate as an effective policy tool, it seems to be essential to accomplish the structural reforms so as to eliminate risk premium due to the concerns about the debt sustainability.

Keywords: Econometric Modeling; Financing Public Borrowing; Expectations (search for similar items in EconPapers)
JEL-codes: C50 C51 C52 C53 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:cebare:v:5:y:2005:i:2:p:39-71

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