@article{article_331690, title={ANALYSIS OF THE RELATIONSHIP BETWEEN INFLATION AND EXCHANGE RATE IN THE APPLICATION OF UNCONVENTİONAL MONETARY POLICY}, journal={İstanbul Üniversitesi İktisat Fakültesi Mecmuası}, volume={66}, pages={61–112}, year={2016}, author={Tunalı, Halil and Yalçınkaya, Yusuf}, keywords={Unconventional Monetary Policy,Real Exchange Rate,Inflation}, abstract={<p> </p> <div class="page" title="Page 1"> <div class="layoutArea"> <div class="column"> <p> <span style="font-size:12pt;font-family:TimesNewRomanPSMT;">Before the global financial crisis of 2007-08, most of our knowledge
about unconventional monetary policy came from studies of Japan’s lost
decade. Following the collapse of Lehman Brothers, central banks of
advanced economies faced the zero bound of nominal interest rates. In
return for that the central banks have responded to the recent financial
crisis with unconventional monetary policy measures. On the other hand,
the Central Bank of the Republic of Turkey has adopted an unconventional
approach since May 2010. </span> </p> <p> </p> <div class="page" title="Page 2"> <div class="layoutArea"> <div class="column"> <p> <span style="font-size:12pt;font-family:TimesNewRomanPSMT;">In this study, we ask the question why central banks need to resort
to unconventional monetary policy measures and to what properties of
these instruments’. In addition, we present the transmission mechanism of
quantitative easing and the international experiences with unconventional
monetary policy measures. </span> </p> <p> <span style="font-size:12pt;font-family:TimesNewRomanPSMT;">To this end, we use the Granger causality test in order to investigate
the relationship between inflation and the real exchange rate changes as
one of the major determinants during this period for the Turkish economy.
Our analysis reveal that the changes in inflation are correlated with real
exchange rate differentials.  </span> </p> </div> </div> </div> <p> <span style="font-size:12pt;font-family:TimesNewRomanPSMT;">  </span> </p> </div> </div> </div>}, number={2}, publisher={Istanbul University}