Significance and importance of ındependency of Central Bank and an assessment for its necessity in the Turkish economy

For the contemporaneous monetary policy discussions, the Central Banks are generally accepted to have a primary function of obtaining price stability. In this thesis, such a phenomenon is tried to be explained by considering both the main definitions interested in this subject and the policy based discussions made on Central Bank independence. For this purpose, at first, the main functions of the Central Banks as a policy maker have been brought out, and then the independence of Central Banks in a historical perspective have been examined by also relating it to the price stability. In the light of these explanations, by informing about the institutional framework and the policy implementation process of the Central Bank of the Republic of Turkey, the advantages of inflation targeting stabilization policy to establish price stability have been discussed for developed and develping country cases as well as the Turkish economy by utilizing the economics literature. The main policy conclusion inferred from the thesis can be summarized such that the policies conducted by a Central Bank having legal independence will be unsuccessful if they are not truly determined and that the deviations of actual from the targeted inflation in this case will be greater.