Taylor Rule in Turkey
Has the Turkey’s monetary policy been sufficiently tight? This question becomes extremely crucial especially after the Turkish politicians’ blistering attack on the central bank that have raised the concerns about the independence of Turkish central bank. Amid these concerns Turkey central bank has cut the rates twice in 2015 bringing its policy rate from 8.75% down to 7.50%.
Taking back to the question asked at the prelude, the Taylor-rule framework can be used to assess the appropriateness of...
Investment Expenditures by Businesses
In a previous post about Turkey’s GDP growth, we mentioned the investment expenditures of the private sector as the weakest part of the economy. Poor track record in the component has been undermining the growth for a dozen of quarters. Companies allocating less money to extend their businesses also have rising concerns around the sustainability. Because investment expenditures play a central role in macroeconomic activity affecting both short-run business cycles and long-run economic growth. These expenditures reflect the general act...