The Role of Money in Turkish Economy

Abstract

A well functioning monetary policy requires the knowledge of the effects of monetary aggregates on output and inflation. In this study, we try to analyze the role of money in a monetary business cycle model in the case of Turkey during the 2006-2017 period. Estimation results of the structural model are also compared with single equations’ estimation results and it is found out that the results of the structural model and single equations are quietly different. The differences show that the results of single equation estimations should cautiously be interpreted. In the model, it is found out that real balances have effects on IS and Philips curves.

Keywords

• parasal büyüklükler
• para politikası
• i̇ş çevrimi modeli
• yeni keynesyen model
• monetary aggregates
• monetary policy
• business cycle model
• new keynesian