The effect of the FED's non-traditional monetary policies after the 2008 global finance crisis on macroeconomic indicators: A panel analysis on Fragile Five

With the global financial crisis experienced in the last quarter of 2008, it has been observed that the traditional monetary policy tools used by central banks to steer the economy are insufficient. With the deepening of the global crisis affecting the whole world, central banks abandoned traditional tools and started to produce unconventional policies. The quantitative easing program of the FED, which is described as the unconventional monetary policy, has had some positive effects on developing countries due to the expectation that the dollar liquidity in the markets will increase and that the interest rates will decrease due to the increasing dollar liquidity reducing the exchange rates. In this study, the effects of the unconventional monetary policies implemented by the FED after the global crisis on Brazil, India, Indonesia, Turkey and South African countries, which are called the "Fragile Five" and which are thought to have potential sensitivity to the FED's quantitative easing policy, are examined. macroeconomic effects are investigated with the PANEL method. For this, four different models were created and the effects of the unconventional monetary policies implemented by the FED after the 2008 Global Financial Crisis on the macroeconomic indicators in the Fragile Five countries were examined with four different models. Before the panel ARDL model was established, the CADF unit root test was performed due to the presence of cross-section dependence and heterogeneity of the variables. The result of the unit root test allowed the analysis to be done with the Panel ARDL method. Accordingly, 4 different Panel ARDL models were created. According to the Panel ARDL results for Model 1, the expansionary monetary policies of the FED are meaningless in explaining the consumer price index. According to the Panel ARDL results for Model 2, the expansionary monetary policy of the FED has a positive and statistically significant effect on the industrial production index. According to the Panel ARDL results for Model 3, the expansionary monetary policies of the FED have a positive and statistically significant effect on the exchange rate. Finally, according to the Panel ARDL results in Model 4, the expansionary monetary policies of the FED are meaningless in explaining the money supply. According to these results, as an indicator of the unconventional expansionary monetary policies of the USA, the US 10-year bond interest rates as the macroeconomic indicators of the Fragile Five countries; among the macroeconomic indicators consisting of industrial production index, consumer price index, exchange rate and M2 money supply, only industrial production index (IP) and exchange rate (DK) have a statistically significant effect, it is understood that there is no significant effect on consumer price index (CPI) and money supply (M2). Key Words: FED, Quantitative Easing, Fragile Five, Panel ARDL