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https://doi.org/10.1080/1331677X.2018.1481445

Asymmetries in monetary policy reaction function and the role of uncertainties: the case of Turkey

Pelin Öge Güney orcid id orcid.org/0000-0002-2093-9133 ; Department of Economics, Hacettepe University, Ankara, Turkey


Puni tekst: engleski pdf 1.315 Kb

str. 1367-1381

preuzimanja: 418

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Sažetak

We analyse the effects of inflation and growth uncertainty on the
monetary policy reaction function of the Central Bank Republic of
Turkey (C.B.R.T.), considering possible asymmetries in the reaction
function over the business cycle. We follow Bec, Salem, and Collard’s
approach in order to specify an asymmetric reaction function
suggesting that central banker interventions are influenced by
business cycles. Our results reveal that the C.B.R.T. has asymmetric
preferences. We find that the C.B.R.T. targets inflation stabilisation,
both in recession and expansion periods. Moreover, the C.B.R.T. reacts
more aggressively to any inflation gap during recessions than it does
during expansions. On the other hand, the C.B.R.T. tries to smooth
fluctuations in output, both during recessions and expansions.
We further discover that the C.B.R.T. reacts to inflation and growth
uncertainties more aggressively in expansion periods.

Ključne riječi

Monetary policy; reaction function; uncertainty; asymmetry; business cycle

Hrčak ID:

206111

URI

https://hrcak.srce.hr/206111

Datum izdavanja:

3.12.2018.

Posjeta: 756 *