Empirical analysis of monetary policies applied after 2008 financial crisis in developing countries

With the development of communication and technology, integration between countries and economies increased in the 21. th century. While this integration provided some benefits like free flow of capital and increased global trade it created adverse effects on magnitude and dissemination of financial crises because of increased dependency between economies. 2008 Global Financial Crisis, that originated in US and spread to World and mainly developing economies, has been an important example of these financial crises. The main aim of this study is to empirically analyze the impact of this crisis on developing economies and the monetary policies applied in these countries in the post-crisis period. We examined the monetary policies applied with the expanded Taylor rule framework which belongs to rule-based monetary policies. We examined this rule which is composed of interest rate, inflation, exchange rate and GDP with quarterly data in 2008:01-2016:04 period for NIC (Brazil, China, India, Indonesia, Malaysia, Mexico, Philippines, South Africa, Thailand, Turkey) using causality analysis developed by Konya (2006). According to our results, there is a uni-directional relationship between interest and inflation, GDP and interest rate and bi-directional causality between exchange rate and interest rate, exchange rate and inflation and inflation and GDP. Moreover, causality relationship for each variable is examined and results are reported for each country.