Exchange rate versus monetary aggregate targeting: the Turkish case

This article compares and contrasts the macroeconomic effects of exchange rate targeting and money supply targeting by using quarterly data from Turkey for the period February 1986-March 2000. The results of the VAR analysis show that the exchange rate does not have the traditional 'hump-shaped...

Full description

Saved in:
Bibliographic Details
Published inApplied economics Vol. 41; no. 16; pp. 2085 - 2092
Main Authors Peren Arin, Kerim, Han Gur, Timur
Format Journal Article
LanguageEnglish
Published London Routledge 01.07.2009
Taylor and Francis Journals
Taylor & Francis Ltd
SeriesApplied Economics
Subjects
Balance of trade
Comparative analysis
Data analysis
Economic theory
Exchange rates
Foreign exchange rates
Macroeconomics
Middle East
Monetary economics
Money supply
Studies
Turkey
Vector-autoregressive models
Turkey
Online AccessGet full text

Cover

More Information
Summary:This article compares and contrasts the macroeconomic effects of exchange rate targeting and money supply targeting by using quarterly data from Turkey for the period February 1986-March 2000. The results of the VAR analysis show that the exchange rate does not have the traditional 'hump-shaped effect' that money supply has on output. In addition, we observe that an exchange rate depreciation leads to a temporary improvement in the trade balance for only a year, while monetary innovations have longer-lasting effects. Those results suggest that money-based targeting is more appropriate than exchange-rate targeting for Turkey.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0003-6846
1466-4283
DOI:10.1080/00036840601019190