Exchange Rate and Inflation Under Weak Monetary Policy: Turkey Verifies Theory

Gürkaynak, Refet S.; Kısacıkoğlu, Burçin; Lee, Sang Seok

doi:10.2139/ssrn.4118082

Cited by 5 publications

(3 citation statements)

References 40 publications

(22 reference statements)

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“…The proposed determinants of the currency crisis in 2000 include political instability, disagreement with the International Monetary Fund, fragility in the banking system, and macroeconomic as well as geopolitical uncertainty (Alper & Alper, 2003;Akyürek, 2006;Bilgin et al, 2019;Çes ¸meci & Önder, 2008;Kyriazis & Economou, 2022; 1 More precisely, the Turkish central bank not only failed to raise its policy rate at the end of 2021 but actually even cut it which is in contrast with standard theory. See also the discussion by Gürkaynak et al (2022). Mariano et al, 2004).…”

Section: Literature Reviewmentioning

confidence: 97%

The role of expectations for currency crisis dynamics—The case of the Turkish lira

Beckmann

Czudaj

2023

Journal of Forecasting

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This paper examines whether and how expectations have contributed to the turbulent path of the Turkish lira since 2008. We derive uncertainty measures surrounding GDP growth, inflation, the interest rate, and exchange rates based on survey data from Consensus Economics. Our results illustrate that forecasts have affected realized exchange rates and stock market returns via increased uncertainty. We also show that expectations regarding monetary policy have changed throughout the sample period. In line with a gradual adjustment of expectations professionals have accounted for the violation of the Taylor rule.

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Section: Literature Reviewmentioning

confidence: 97%

The role of expectations for currency crisis dynamics—The case of the Turkish lira

Beckmann

Czudaj

2023

Journal of Forecasting

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“…In contrast to the common point of view, the current policy follows that higher interest rates do not result from higher inflation, but, rather, that higher interest rates cause higher inflation. As a result, Turkey's central bank has gradually voted to cut the country's key interest rate, leading to the lira sinking to new record lows against foreign currencies [43]. It is also worth noting that the credit rates lean towards increasing despite the decrease in the country's interest rate.…”

Section: Uncertainties In the Turkish Economymentioning

confidence: 99%

A Comprehensive Analysis of Strategies, Challenges and Policies on Turkish Sustainable Energy Development

Dindar

2022

Journal of Engineering Technology and Applied Sciences

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Turkey's rapid population and economic growth have caused a significant increase in energy demand over the last two decades. As a result, a process of evaluating alternative energy strategies and policies was required to be formulated carefully along with the country's longer-term decarbonisation aims. Although Turkey's considerable renewable energy potential exists, its dependency on foreign energy and its dramatically depreciating currency have been the main drivers of revisions to these renewable energy-related policies. This paper aims to demonstrate and evaluate all the strategies and challenges of Turkey's green steps toward a sustainable future. Sustainable developments of many developed countries have been examined and compared to assess Turkish strategies and significant policies that have been taken. As findings, it has been revealed that policy revisions regarding the use of domestic technology in green power plants decelerate investments for a short time. However, it has been found that renewable energy patent applications have declined, although domestic technology in green energy plants has been promoted through these policy revisions. As a result of this dilemma, the quality and effectiveness of green research and development (R&D) in Turkey have been investigated and then benchmarked with most leading countries. It has been observed that there is no correlation and relation between the patent application and the articles on renewable energy. Therefore, the paper has provided insight into new policies and strategies to enhance the productivity of R&D for both Turkey and developing similar countries. Consequently, potential measures to increase Turkey's green energy use and production are discussed and proposed systematically, considering those findings.

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“…However, the Bank of Japan arguably tried this approach a couple of times in the 2000 and 2006, and I think it is safe to say that those Neo‐Fisherian experiments didn't work out well given deflation worsened afterwards both times (see Kole & Martin, 2008; Ueda, 2012). Another more recent Neo‐Fisherian experiment has been Turkey where the central bank was cajoled by President Recep Erdoğan into lowering, not raising, interest rates to tame inflation, and it is hard to see the subsequent massive exchange rate depreciation and higher inflation as a ringing endorsement of the Neo‐Fisherian theory (see Gürkaynak et al ., 2023).…”

mentioning

confidence: 99%

Zero Interest Policy & the New Abnormal: A Critique, by MichaelBeenstock (Oxford University Press, Oxford, UK, 2022)

Morley

2024

Economic Record

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Inquiry into MMIWG+ released its final report in 2019 demonstrating the clear link that 'resource extraction projects can lead to increased violence against Indigenous women at the hands of non-Indigenous men, as well as increased violence within Indigenous communities (National Inquiry into MMIWG, 2019, 584).The book concludes by reflecting again on the guiding principles of Cree economic relationships, and returning again to grounded practices of resurgence (Corntassel & Hardbarger, 2019). Reflecting on Cree practices of cooperative gardening, the author notes that:engaging Cree agricultural practices to increase food sovereignty is an act of self determination. Indigenous food sovereignty maintains and restores relationships between Cree people and the land, as well as providing ways to connect to different aspects of Cree personhood (spiritual, physical, mental, emotional) and Cree peoplehood (territory, ceremonial cycles, language, living histories) positively.All of these practices exist in ways that are often outside of what is measured in terms of productivity or output in mainstream economics. However, all may be increasingly important to our collective wellbeing now and into the future.

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Exchange Rate and Inflation Under Weak Monetary Policy: Turkey Verifies Theory

Cited by 5 publications

References 40 publications

The role of expectations for currency crisis dynamics—The case of the Turkish lira

The role of expectations for currency crisis dynamics—The case of the Turkish lira

A Comprehensive Analysis of Strategies, Challenges and Policies on Turkish Sustainable Energy Development

Zero Interest Policy & the New Abnormal: A Critique, by MichaelBeenstock (Oxford University Press, Oxford, UK, 2022)

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