Credit channel and capital flows: A macroprudential policy tool? Evidence from Turkey
[ X ]
Tarih
2016
Yazarlar
Dergi Başlığı
Dergi ISSN
Cilt Başlığı
Yayıncı
Walter de Gruyter GmbH
Erişim Hakkı
info:eu-repo/semantics/closedAccess
Özet
Rapid credit growth induced by sudden capital inflows may negatively affect a country's economic performance, with the resulting outflows turning into a financial crisis. The purpose of this study is to determine whether controlling the credit channel of monetary policy could be used as a macroprudential tool to suppress the effects of sudden capital inflows on economic performance for small open economies like Turkey. In this paper, using the Vector Autoregression methodology employed by (Bernanke, S. B., M. Gertler, and M. Watson. 1997. "Systematic Monetary Policy and the Effects of Oil Price Shocks." Brookings Papers on Economic Activity 1: 91-157), we investigate whether shutting down the credit channel helps reduce the effects of capital inflows. Indeed, empirical evidence from Turkey shows that doing so decreases the effects of capital inflows on imports and industrial production, but further decreases interest rate and prices and further appreciates the domestic currency. Therefore, it may be prudent to support credit control with additional policy tools to prevent a further decrease in interest rate and prices and a further appreciation of the domestic currency. © 2016 by De Gruyter 2016.
Açıklama
Anahtar Kelimeler
Capital Flows, Credit Channel, Macroeconomic Prudential Policy
Kaynak
B.E. Journal of Macroeconomics
WoS Q Değeri
N/A
Scopus Q Değeri
Q4
Cilt
16
Sayı
1
Künye
Varlık, S., Berument, M. H. (2016). Credit channel and capital flows: a macroprudential policy tool? Evidence from Turkey. The BE Journal of Macroeconomics, 16(1), 145-170.
