Identifying the Liquidity Effects of Monetary Policy Shocks For a Small Open Economy: Turkey

Hakan Berument (), Selahattin Togay and Afsin Sahin

MPRA Paper from University Library of Munich, Germany

Abstract: This paper proposes a new liquidity measure for a small open economy. The new measure includes the net liquidity provided to the system by a central bank after accounting for the central bank’s involvement in the foreign exchange market. Empirical evidence gathered from Turkey suggests that a positive innovation in liquidity increases output temporarily and that its effect on prices, exchange rate and money are permanently higher.

Keywords: Liquidity effect; Small and open economies; VAR models. (search for similar items in EconPapers)
JEL-codes: E43 E50 E52 (search for similar items in EconPapers)
Date: 2011-09
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Citations: View citations in EconPapers (3)

Published in Open Economies Review 4.22(2011): pp. 649-667

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Journal Article: Identifying the Liquidity Effects of Monetary Policy Shocks for a Small Open Economy: Turkey (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:46883

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