Please use this identifier to cite or link to this item: https://hdl.handle.net/20.500.11851/6726
Title: Fiscal Dominance and Inflation Targeting: Lessons from Turkey
Authors: Ersel, Hasan
Özatay, Fatih
Keywords: fiscal dominance
financial sector
exchange rate pass-through
inflation inertia
inflation targeting
Issue Date: 2008
Publisher: M E Sharpe Inc
Abstract: In the aftermath of the 2000-2001 crisis in Turkey, the banking sector was in turbulence, requiring immediate action. The rescue operation significantly increased the public debt ratio with respect to gross domestic product. At the beginning of 2002, the central bank of Turkey announced that it was going to implement an implicit inflation-targeting regime. The fiscal dominance caused by the high debt ratio severely constrained the conduct of monetary policy. Other obstacles to the conduct of monetary policy included a high level of exchange rate pass-through, inflation inertia, and a weak banking sector. This paper offers an account of the monetary policy experience of Turkey in the postcrisis period and provides lessons for policymakers in other emerging markets.
URI: https://doi.org/10.2753/REE1540-496X440603
https://hdl.handle.net/20.500.11851/6726
ISSN: 1540-496X
Appears in Collections:İktisat Bölümü / Department of Economics
Scopus İndeksli Yayınlar Koleksiyonu / Scopus Indexed Publications Collection
WoS İndeksli Yayınlar Koleksiyonu / WoS Indexed Publications Collection

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