Turkish economy in the aftermath of the global crisis has faced an unprecedented divergence between domestic and external demand. Increasing risks in the face of surging short-term capital inflows, deteriorating current account deficit and rapid credit growth have called for an alternative...

This paper compares the ability of different market instruments in terms of predicting monetary policy decisions to find out which one best captures market participants policy expectations. Towards this end, policy rate expectations implied by various market instruments and different approaches...