TY  - JOUR
TT  - MONETARY, MACROPRUDENTIAL POLICIES AND HOUSING CYCLES: EXPLORING THE NEXUS IN TURKEY
AU  - Doğruel, Ali
AU  - Polat, Umurcan
PY  - 2016
DA  - March
DO  - 10.14780/iibd.00004
JF  - Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi
PB  - Marmara Üniversitesi
WT  - DergiPark
SN  - 2587-2672
SP  - 233
EP  - 260
VL  - 37
IS  - 2
LA  - en
N2  - Given the pro-cyclicality of the financial cycles on the business cycles, it is ofimportance to analyze whether the use of the traditional monetary policy instrumentsalong with the prudential responsibilities result in the prevention of unsustainablefinancial cycles e.g., housing cycles. Still, there is not enough empirical evidence regardingthe exploration of the nexus between housing variables and monetary – macroprudentialpolicy rules. Observing the developments in housing market in Turkey,that is, the simultaneous increase in both house prices and residential investments inthe last decade, the nexus between housing market and macro economy deserves afurther investigation.Accordingly, a new Keynesian DSGE model is estimated with Turkish datafor a period 2010-2014 using Bayesian techniques in this study. Results reveal thatarguments for a monetary policy regime that produces aggregate price stability will,as a byproduct, tend to promote stability of housing markets don’t fully hold in theestimation. It can also be stated that the monetary policy rules with existing prudentialpolicy instruments may not result in prevention of further housing “bubbles”. Thevariance-shock decomposition analyses show that demand and supply shocks dramaticallydetermine the cycles of the real housing prices and residential investmentwhereas the monetary policy shocks and shocks in central bank’s inflation target donot explain the volatility of the housing variables.
UR  - https://doi.org/10.14780/iibd.00004
L1  - https://dergipark.org.tr/tr/download/article-file/1367786
ER  -