Evaluation of empirical findings measuring the effectiveness of monetary transmission mechanism in Turkey

Abstract

Monetary policy affects the real economy through different channels. In literature, these channels are classified as the interest channel, exchange rate channel, credit channel, asset prices channel and expectations channel. In this study, we examine the empirical research that deal with the effects of monetary transmission channels and analyze the interaction between monetary policy and real economy in Turkey. In conclusion, it is seen that the stock channel is weak and the credit channel was partially operating. It is observed that the credit channel is active, especially after the 2001 crisis. It is also found that the expectations channel is the most effective monetary transmission channel. © EuroJournals Publishing, Inc. 2011. © 2011 Elsevier B.V., All rights reserved.