The response of monetary policy to the COVID-19 pandemic in Turkey. The path of a credit-based economic recovery

Abstract

The goal of this paper is to investigate the reaction of monetary policy in Turkey to the coronavirus disease pandemic through the credit channel. For this purpose, the paper employs nonlinear smooth transition models considering nonlinearity. The empirical findings show a positive reaction of monetary policy to the confirmed cases and deaths. Therefore, the paper discovers the credit channel in Turkey is likely to play a critical role in the fast recovery of the Turkish economy during the pandemic period.

Keywords

• covid-19 pandemic
• monetary policy
• credits
• turkey