Inflation targeting and macroeconomic performance since the Great Recession

2015 ◽  
Vol 67 (3) ◽  
pp. 598-613 ◽  
Author(s):  
Thomas Barnebeck Andersen ◽  
Nikolaj Malchow-Møller ◽  
Jens Nordvig
Keyword(s):  
Great Recession ◽  
Inflation Targeting ◽  
Macroeconomic Performance ◽  
The Great Recession

scholarly journals What to Smooth: Rate of Interest or the Foreign Exchange? Turkish Monetary Policy under Turbulent Times

2014 ◽  
Vol 10 (3) ◽  
Author(s):  
A. Erinc Yeldan ◽  
Gunes Kolsuz ◽  
Burcu Unuvar
Keyword(s):  
Interest Rate ◽  
Foreign Exchange ◽  
Great Recession ◽  
Inflation Targeting ◽  
Policy Option ◽  
The Great Recession ◽  
Turbulent Times ◽  
Exchange Markets ◽  
The Interest Rate ◽  
Republic Of Turkey

AbstractThis paper studies the new monetary stance of the Central Bank of Republic of Turkey (CBRT) during the Great Recession. We note that characteristics of the post-1997 “Great Moderation” revealed interest rate smoothing as a valid policy option for the inflation targeting central banks. Utilizing econometric analysis on a general form of a Taylor Rule, we search for the relative weights of the objective function of the CBRT over Jan 2010–Dec 2013. We find that over the Great Recession, the CBRT’s focus on “interest smoothing” had been maintained; and yet the burden of adjustment fell disproportionately on the foreign exchange markets. Furthermore, weak credibility of the CBRT, lack of a simple policy rule, and noisy policy communications evidence that pre-requisites of the interest rate smoothing are not being fulfilled. Inevitable sharp policy corrections that follow smoothing periods proved insufficient against the voluminous global flows.

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