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Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach
Abstract
It is important that the Central Bank determines policy interest rates at what level in terms of the increase in foreign exchange inflows and not decreasing the investment expenditures in other words, ensuring the balance between the financial and real sector. For this reason, the purpose of this study is to test at which level the Central Bank of Turkey should determine the policy interest rates for 2001:08-2016:06 period economy of Turkey with the help of Taylor (1993) Rule. For this purpose, the inflation gap, the output gap and the exchange rate gap variables, which exist in Taylor’s Equation, were obtained by using the Beveridge and Nelson (1981), which is a stochastic Degradation Technique, and which considers the permanent shocks under the assumption of Outward-Oriented Economy Hypothesis. With the help of the empirical findings, it is also aimed to determine the effects of the abovementioned variables on policy interest rates; and in this context, to reveal the level of the policy interest rates of the Central Bank of Turkey, and to develop policy recommendations for this purpose.
Keywords
Details
Primary Language
English
Subjects
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Journal Section
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Publication Date
December 1, 2016
Submission Date
December 1, 2016
Acceptance Date
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Published in Issue
Year 2016 Number: 7
APA
Bal, H., Tanrıöver, B., & Erdoğan, E. (2016). Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach. International Journal of Academic Values Studies, 7, 95-106. https://izlik.org/JA98UB88JR
AMA
1.Bal H, Tanrıöver B, Erdoğan E. Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach. International Journal of Academic Values Studies. 2016;(7):95-106. https://izlik.org/JA98UB88JR
Chicago
Bal, Harun, Banu Tanrıöver, and Esma Erdoğan. 2016. “Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach”. International Journal of Academic Values Studies, nos. 7: 95-106. https://izlik.org/JA98UB88JR.
EndNote
Bal H, Tanrıöver B, Erdoğan E (December 1, 2016) Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach. International Journal of Academic Values Studies 7 95–106.
IEEE
[1]H. Bal, B. Tanrıöver, and E. Erdoğan, “Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach”, International Journal of Academic Values Studies, no. 7, pp. 95–106, Dec. 2016, [Online]. Available: https://izlik.org/JA98UB88JR
ISNAD
Bal, Harun - Tanrıöver, Banu - Erdoğan, Esma. “Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach”. International Journal of Academic Values Studies. 7 (December 1, 2016): 95-106. https://izlik.org/JA98UB88JR.
JAMA
1.Bal H, Tanrıöver B, Erdoğan E. Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach. International Journal of Academic Values Studies. 2016;:95–106.
MLA
Bal, Harun, et al. “Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach”. International Journal of Academic Values Studies, no. 7, Dec. 2016, pp. 95-106, https://izlik.org/JA98UB88JR.
Vancouver
1.Harun Bal, Banu Tanrıöver, Esma Erdoğan. Determining the Policy Interest Rates of the Central Bank Within Framework Taylor Rule: Stochastic Trend Approach. International Journal of Academic Values Studies [Internet]. 2016 Dec. 1;(7):95-106. Available from: https://izlik.org/JA98UB88JR