Normalization of Monetary Policy After Global Crisis: What is Normalization?

Öz

Global financial crisis was not only created a chaos but also changed the contemporary monetary policy. The global economy faced with a shift on policy tools because by starting the liquidity trap that American economy faced forced the authorities to find new strategies. Policy makers have started to consider financial stability with price stability and to reshape monetary policy they created new policy tools.

 

The descried tools for new exit ways of powerful central banks especially Fed, helped to overcome the global crisis while bringing new issues. Under the circumstances Fed started a normalization process for monetary policy. Due to the gravity of Fed, other central banks had to adopt the current stream. In this conjuncture Central Bank of the Republic of Turkey has changed the policy tools correspondingly. The purpose of this paper is to evaluate the change in the monetary policy path of Fed and ECB with the behavioral pattern of Central Bank of the Republic of Turkey with “New Normalization” concept.

Anahtar Kelimeler

• Monetary Policy,Central Bank,Unconventional Monetary Tools

Kaynakça

1. Greenwood, R., Hanson, S.G., Stein, J.C., The Federal Reserve’s Balance Sheet as a Financial-Stability Tool. Prepared for the Federal Reserve Bank of Kansas City’s 2016 Economic Policy Symposium in Jackson Hole. http://www.people.hbs.edu/rgreenwood/JH2016_IA.pdf
2. Carlos Cacres, Yan Carrière-Swallow, Ishak Demir, and Bertrand Gruss U.S. Monetary Policy Normalization and Global Interest Rates IMF Working Paper WP/16/195
3. Başçı, E., Kara, H. (2011). Financial Stability and Monetary Policy. CBRT Working Paper, No: 11/08.
4. BIS 87th Annual Report.
5. CBRT, Annual Report, 2009
6. CBRT, Annual Report 2013
7. CBRT, Inflation Report 2017IV
8. CBRT, Annual Report, 2012

9. CBRT, Bulletin 27
10. CBRT, Annual Report 2012
11. CBRT, Financial Stability Report May 2015
12. Küçüksaraç and Özel, Reserve Options Mechanism and Computation of Reserve Options Coefficients, CBT Research Notes in Economics, Vol. 2012-33 / 07, December 2012.
13. CBRT, Inflation Report, 2017IV.
14. Global Crisis in the US vs the Eurozone: Banks and monetary policy, Alex Cukierman 16 April 2016. http://voxeu.org/article/global-crisis-us-vs-eurozone-banks-and-monetary-policy Blanchard ve Johnson, Macroeconomics, 2013.
15. The New Normal That Never Was, Mark Cliffe, 19 May 2016, voxeu https://www.federalreserve.gov/faqs/what-does-federal-reserve-mean-when-it-talks-about-normalization-of-monetary-policy.htm)
16. Bindseil, U., 2016, Evaluating monetary policy operational frameworks, Paper presented at 2016 Economic Symposium organized by the Federal Reserve Bank of Kansas City, 24-26 August 2016, Jackson Hole, WY.
17. Bostic, R., 2017, Balance-Sheet Normalization in the United States, Speech delivered at the Unconventional Monetary Policy: Lessons Learned Conference organized by the International Finance Centre, 12- 13 October 2017, Hong Kong.
18. Fed, 2014, Policy Normalization Principles and Plans, Fed statement available at https://www.federalreserve.gov/monetarypolicy/files/FOMC_PolicyNormalization.pdf.
19. Greenwood, R., S.G. Hanson and J.C. Stein, 2016, The Federal Reserve’s Balance Sheet as a FinancialStability Tool, Jackson Hole Economic Symposium Conference Proceedings (Federal Reserve Bank of Kansas City) (2016): 335–397. 24-26 August 2016, Jackson Hole, WY
20. Perli, R., 2017, Normalizing Central Banks’ Balance Sheets: What Is The New Normal? Strategic Issues, Paper presented at Normalizing Central Banks’ Balance Sheets: What Is The New Normal? Conference jointly organized by Columbia University's School of International and Public Affairs and the Federal Reserve Bank of New York, 11 July 2017, New York, NY.
21. Rosengren, E.S., “Early Observations on Gradual Monetary Policy Normalization” President & Chief Executive Officer Federal Reserve Bank of Boston Presentation to the Greater Boston Chamber of Commerce Boston, Massachusetts January 13, 2016
22. BeckG.W., Wieland, V., How to Normalize Monetary Policy in the Euro Area, Institute for Monetary and Financial Stability, WORKING PAPER SERIES NO. 115, September, 2017.
23. Powell, J.H., Thoughts on the Normalization of Monetary Policy, Speech At the Economic Club of New York, June 2017.
24. Thomsen, P., The Euro Zone: What’s Next, Speech at the Financial Times Investment Management Summit, London, International Monetary Fund September 28, 2017.
25. Alper,K., Kara, H., Yorukoglu, M., Reserve Option Mechanism, Central Bank Review, Vol. 13 (January 2013), pp.1-14.