Exchange rate versus monetary aggregate targeting: the Turkish case
This article compares and contrasts the macroeconomic effects of exchange rate targeting and money supply targeting by using quarterly data from Turkey for the period February 1986-March 2000. The results of the VAR analysis show that the exchange rate does not have the traditional 'hump-shaped effect' that money supply has on output. In addition, we observe that an exchange rate depreciation leads to a temporary improvement in the trade balance for only a year, while monetary innovations have longer-lasting effects. Those results suggest that money-based targeting is more appropriate than exchange-rate targeting for Turkey.
Year of publication: |
2009
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Authors: | Arin, Kerim Peren ; Gur, Timur Han |
Published in: |
Applied Economics. - Taylor & Francis Journals, ISSN 0003-6846. - Vol. 41.2009, 16, p. 2085-2092
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Publisher: |
Taylor & Francis Journals |
Saved in:
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