This paper examines the roles of bank capital regulation and monetary policy in mitigating procyclicality and promoting macroeconomic and financial stability. The analysis is based on a dynamic stochastic model with imperfect credit markets. Macroeconomic stability is defined in terms of a...

Heightened volatility in cross-border capital flows has increased exchange rate volatility across emerging markets as well as in advanced economies, setting the stage for more active management of currencies. Traditionally, foreign exchange rate intervention has been the primary tool to address...

Many central banks in emerging economies have used reserve requirements (RR) to alleviate the trade-off between financial stability and price stability in recent years. Notwithstanding their widespread use, transmission channels of RR have remained largely as a black-box. In this paper, we use...

In this study, by using a panel data of Turkish banks, we empirically analyze whether monetary policies that are able to manipulate liquidity positions of banks can affect bank lending. Our results suggest that bank specific liquidity is important in credit supply. Moreover, in determining their...

Finansal sektoru anlamanin onemi kuresel krizle birlikte daha acik bir sekilde ortaya cikmis, sektorun yapisi ve isleyisi makroekonomik politikalara yonelik tartismalarin odak noktasini olusturmustur. Bu anket calismasi Turkiye’deki finansal sistemin buyuk bir kismini olusturan bankacilik...

This paper analyzes the transmission process of monetary policy in a closed-economy New Keynesian model with monopolistic banking, credit market imperfections, and a cost channel. Lending rates incorporate a risk premium, which depends on firms’ net worth and cyclical output. The supply of...

The Turkish government started an employment subsidy program in 2008 to generate new employment for younger men and all women, which are the relatively disadvantaged groups in the Turkish labor market. In this paper, we use a nationally representative micro-level dataset and a...

The empirical analysis confirms that household expectations have a direct role on their consumption and saving behaviour in addition to their indirect influence through the income channel. The econometric results show that there is a positive and statistically significant relationship between...

Turkey has the lowest hours worked (the product of total employment and annual hours per worker, divided by the size of the working-age population) among the OECD countries. We study the changes in hours of work following Ohanian, Raffo, and Rogerson (Journal of Monetary Economics, 2008) and...

We study the trilemma configuration of the Turkish economy for the period between 2002 and 2012. The paper starts by empirically testing the Mundell-Fleming theoretical concept of an \impossible trinity" (trilemma) for Turkey, following Aizenman, Chinn and Ito (ACI, 2008). This includes...