Following a dramatic collapse of a fixed exchange rate based inflation stabilization program, Turkey moved into a free floating exchange rate system in February 2001. In this paper, an asymmetric stochastic volatility model of the foreign exchange rate in Turkey is estimated for the floating...

This paper evaluates the developments in the Turkish economy in light of the Central Bank's policies during a recent period of floating exchange rate system. It is found that the Central Bank was effective in containing volatility and reducing the average inflation rate while there was a strong...

This paper provides new empirical evidence for currency substitution in different emerging market economies. Estimation results from a money-in-the-utility-function framework indicate that foreign currencies are strong substitutes for domestic currency in producing liquidity services

In recent years, many emerging market economies have switched or are in the process of switching to a floating exchange rate regime. Most of these economies have a history of high inflation and a high level of foreign currency denominated debt. Therefore, the stability of the exchange rate and...

The devastating earthquake that struck the most densely populated and industrialized area of Turkey on 17 August, 1999 was one of the most damaging natural disasters during this century. This paper is a first attempt to estimate the transition path of the Turkish economy to its new equilibrium...

The method of reconstructing an n-dimensional system from observations is to form vectors of m consecutive observations, which for m 2n, is generically an embedding. This is Takens's result. The Jacobian methods for Lyapunov exponents utilize a function of m variables to model the data, and the...