Does time inconsistency problem apply for Turkish monetary policy?

We analyze the implications of the time inconsistency problem for the Turkish monetary policy in the last two decades. After deriving the restrictions that the Barro and Gordon model imposes on a time series model for inflation and output, we show that the time inconsistency problem can explain both...

Full description

Saved in:
Bibliographic Details
Published in:ODTÜ gelişme dergisi 2005-12, Vol.32 (2), p.467
Main Authors: Özlale, Ümit, Özcan, Kivilcim Metin
Format: Article
Language:English
Subjects:
Central banks
Credibility
Economic models
Inflation
Inflation rates
Liberalization
Literature reviews
Macroeconomics
Monetary policy
Output
Phillips curve
Studies
Time series
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We analyze the implications of the time inconsistency problem for the Turkish monetary policy in the last two decades. After deriving the restrictions that the Barro and Gordon model imposes on a time series model for inflation and output, we show that the time inconsistency problem can explain both the short-run and the long-run behavior of inflation and output in the Turkish economy. The results also reveal that the Turkish monetary policymakers have put more emphasis on output stability than price stability in the last decade. [PUBLICATION ABSTRACT]
ISSN:1010-9935