The effects of the 2008 global crisis in the context of monetary policy: The case of Turkey

The global crisis experienced in 2008 is considered an important turning point in the world economy. Many factors have been effective in the emergence of this crisis. However, the monetary transmission mechanism has also been an important factor contributing to this crisis. The monetary transmission mechanism refers to how monetary policies are reflected in the financial markets within the country. With the globalization process, the connections between financial markets have increased. For this reason, it has become inevitable for monetary policies to cross national borders and affect the economies of other countries. Before the 2008 crisis, due to the low interest rates in the USA, global liquidity increased as investors in the USA turned to higher interest rates in other countries. This situation was reversed when the Mortgage crisis that started in 2007 affected the whole world. After the mortgage crisis in the USA, the banking system began to weaken and many banks went bankrupt. This situation had a negative impact on the global financial system. The aim of this study is to reveal the effects of the 2008 global crisis in terms of Turkey in the context of monetary policy practices. VAR Analysis, Johansen cointegration test and Granger causality test were used in the study. According to the findings, while there is a long-term relationship between the variables, a causal relationship was determined between some variables.