International Journal of

ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN: 2313-626X

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 Volume 8, Issue 9 (September 2021), Pages: 75-78

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 Original Research Paper

 Title: The impact of interest rate corridor on monetary policy efficiency: VEC Granger causality evidence from the central bank of the Republic of Turkey

 Author(s): Arzu Yilmaz 1, Zehra Vildan Serin 2, *, Celal Tasdogan 3

 Affiliation(s):

 1Department of Economics, Hasan Kalyoncu University, Gaziantep, Turkey
 2Faculty of Economics, Administrative and Social Sciences, Hasan Kalyoncu University, Gaziantep, Turkey
 3Department of Economics, Faculty of Economics and Administrative Sciences, Ankara Hacı Bayram Veli University, Ankara, Turkey

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 * Corresponding Author. 

  Corresponding author's ORCID profile: https://orcid.org/0000-0002-5514-7910

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2021.09.010

 Abstract:

This paper aimed to analyze the impacts of interest rate corridor policy on monetary efficiency in Turkey, applying the Error Correction Model and VEC Granger causality. The data set consisted of 108 observations for each time series from May 2010 to December 2019. The Granger causality test results indicated a significant impact of the borrowing rate on the inflation rate. Response function revealed that a change in the borrowing interest rate affected the opposite way in the inflation rate with a 3-month lag. An increase in the lending rate caused an increase in the BIST 100 index value. It is concluded that the interest rate corridor implementation successfully increased the flexibility and effectiveness of the monetary policy in Turkey. 

 © 2021 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords: Monetary policy, Interest rate corridor, Turkey, Vector error correction, Granger causality, VAR

 Article History: Received 1 April 2021, Received in revised form 21 June 2021, Accepted 24 June 2021

 Acknowledgment 

No Acknowledgment.

 Compliance with ethical standards

 Conflict of interest: The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

 Citation:

 Yilmaz A, Serin ZV, and Tasdogan C (2021). The impact of interest rate corridor on monetary policy efficiency: VEC Granger causality evidence from the central bank of the Republic of Turkey. International Journal of Advanced and Applied Sciences, 8(9): 75-78

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 Tables

 Table 1 Table 2 Table 3 Table 4 Table 5   

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