YILMAZ, Ahmet; ARI, Ali
June 2013
Marmara University Journal of Economic & Administrative Sciences;2013, Vol. 34 Issue 1, p11
Academic Journal
Examining the period of 2001-2011, the period when success in fight with galloping inflation was achieved, this study aims to identify the reasons for success and the unique features of the Turkish experience. The prevailing opinion within the circles of the Central Bank on the reasons of declining inflation is that the monetary policy implemented for a decade and the inflation targeting strategy lie behind that success. In contrast, in this study it has been showed that the inflation was brought down not under tight but loose monetary indicators during the period under review, and along with the monetary policy strategy other factors such as the tight fiscal policy, an overvalued TL policy, strict incomes policy and external competition from cheap imports and import as a result of the increases in the volume of trade might, i.e. foreign trade and exchange rate policy have been probably more effective. For this reason, it is assessed that the sustainability of disinflation in Turkey is attached to the the tight fiscal and incomes policy and sustainability of the exchange rate policy, and therefore effective coordination between the Central Bank and the overall management of the economy and the government has importance.


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