ASYMMETRY IN INFLATION TARGETING

Pınar Deniz; Erhan Aslanoğlu

doi:10.14780/muiibd.665062

ASYMMETRY IN INFLATION TARGETING

Abstract

Following the world financial crisis beginning in the last quarter of 2008, aggregate demand and commodity prices have declined sharply leading to a fast decline in world inflation. This different and new period reflects the rise in risk appetite leading to high fluctuations in the short term capital flows. World central banks revised their monetary policy to the changing conditions taking into account financial stability. In 2002, the Central Bank of Republic of Turkey adopted inflation targeting (in the implicit form) to maintain price stability. After 2008, parallel to the developments in global markets, the Turkish economy reflects decline in inflation rates. Together with the changes in the economic conditions, estimating monetary policy models in the form of constant-coefficient and symmetric specification may lead to erroneous interpretations. This study analyzes the existence of structural break(s) and asymmetric behavior for the 2003-2016 period. The paper also examines the monetary policy model under the New Keynesian DSGE model. The Turkish monetary policy investigated for the period presents October 2009 as the break point under different models and structural break tests. Asymmetric reactions to interest rate, output and exchange rate are observed which are suggesting changes in the monetary preferences of Central Bank of Republic of Turkey.

Keywords

Inflation Targeting,Structural Break,Asymmetry,New Keynesian DSGE Model

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Details

Primary Language

English

Subjects

Economics

Journal Section

Research Article

Authors

Pınar Deniz ^*
Türkiye

Erhan Aslanoğlu This is me
Türkiye

Publication Date

January 6, 2020

Submission Date

April 8, 2019

Acceptance Date

October 22, 2019

Published in Issue

Year 2019 Volume: 41 Number: 2

DOI

https://doi.org/10.14780/muiibd.665062

IZ

https://izlik.org/JA43TN98BG

Cite

RIS / Bibtex

APA

Deniz, P., & Aslanoğlu, E. (2020). ASYMMETRY IN INFLATION TARGETING. Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 41(2), 391-412. https://doi.org/10.14780/muiibd.665062

AMA

1.Deniz P, Aslanoğlu E. ASYMMETRY IN INFLATION TARGETING. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2020;41(2):391-412. doi:10.14780/muiibd.665062

Chicago

Deniz, Pınar, and Erhan Aslanoğlu. 2020. “ASYMMETRY IN INFLATION TARGETING”. Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi 41 (2): 391-412. https://doi.org/10.14780/muiibd.665062.

EndNote

Deniz P, Aslanoğlu E (January 1, 2020) ASYMMETRY IN INFLATION TARGETING. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 41 2 391–412.

IEEE

[1]P. Deniz and E. Aslanoğlu, “ASYMMETRY IN INFLATION TARGETING”, Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, vol. 41, no. 2, pp. 391–412, Jan. 2020, doi: 10.14780/muiibd.665062.

ISNAD

Deniz, Pınar - Aslanoğlu, Erhan. “ASYMMETRY IN INFLATION TARGETING”. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 41/2 (January 1, 2020): 391-412. https://doi.org/10.14780/muiibd.665062.

JAMA

1.Deniz P, Aslanoğlu E. ASYMMETRY IN INFLATION TARGETING. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2020;41:391–412.

MLA

Deniz, Pınar, and Erhan Aslanoğlu. “ASYMMETRY IN INFLATION TARGETING”. Marmara Üniversitesi İktisadi Ve İdari Bilimler Dergisi, vol. 41, no. 2, Jan. 2020, pp. 391-12, doi:10.14780/muiibd.665062.

Vancouver

1.Pınar Deniz, Erhan Aslanoğlu. ASYMMETRY IN INFLATION TARGETING. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2020 Jan. 1;41(2):391-412. doi:10.14780/muiibd.665062

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