Reaction of Monetary Policy to Cost-Push Inflation in Turkey: A Leaning against Wind?

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Atıf İçin Kopyala

TETİK M., BARİ B.

ESKISEHIR OSMANGAZI UNIVERSITESI IIBF DERGISI-ESKISEHIR OSMANGAZI UNIVERSITY JOURNAL OF ECONOMICS AND ADMINISTRATIVE SCIENCES, cilt.17, sa.1, ss.256-271, 2022 (ESCI)

• Yayın Türü: Makale / Tam Makale
• Cilt numarası: 17 Sayı: 1
• Basım Tarihi: 2022
• Doi Numarası: 10.17153/oguiibf.992149
• Dergi Adı: ESKISEHIR OSMANGAZI UNIVERSITESI IIBF DERGISI-ESKISEHIR OSMANGAZI UNIVERSITY JOURNAL OF ECONOMICS AND ADMINISTRATIVE SCIENCES
• Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI)
• Sayfa Sayıları: ss.256-271
• Anahtar Kelimeler: Inflation, Cost-push Shocks, Taylor Rule, Threshold Generalized Methods of Moment, CENTRAL BANK, RULES, UNCERTAINTIES, STABILITY, RESPOND
• Anadolu Üniversitesi Adresli: Evet

Özet

In Turkey, monetary policy responds to cost shocks rather than the inflation gap and output gap. To clarify this policy, we estimate the linear and non-linear Taylor rule using the Threshold GMM for 2006:01-2020:07. The linear model estimates that the policy rate responds significantly to the inflation gap and the real effective exchange rate. The non-linear model captures that monetary policy differs in regimes where imported goods and input prices are set as high and low. In a high price regime, monetary policy also reacts to cost-push shocks. The response of monetary policy to the exchange rate implicitly leads to "a leaning against the wind".