Para politikası uygulaması üzerine üç makale

The first chapter, initially, develops an automated system that conducts a content analysis using newspaper coverage to generate a high frequency news-driven sentiment index. The system classifies the news as good, bad or neutral. Then, the chapter investigates the relationship between the sentiment index and the financial markets in Turkey: exchange, stock and bond markets. The findings on the exchange markets show the value of Turkish Lira (TL) against the US Dollar (USD) and the emerging market currencies after controlling for the macroeconomic fundamentals. The findings hint these variables are affective in varying horizons. The US economic fundamentals have immediate impact and positive announcements appreciate the USD whereas the positive Turkish economic figures appreciate the TL in the weekly term. The conclusion on the sentiment index shows the index fails to have a significant impact. The shocks in sub-indices of the sentiment, on the other hand, become significant in a week. Possibly, the portfolio adjustment process is the reason behind the delay of the impact. The significant impact of the sentiment on the stock market appears both in daily and weekly terms. The estimation process of the bond markets fails to produce reliable estimates. The second chapter investigates the role of interest rate volatility as a monetary policy tool. After the 2008-2009 global financial crisis, there was abundance of liquidity as a result of large-scale quantitative easing programs. As the advanced countries did not recover quickly, the liquidity was channeled to emerging economies, which then attempted to cope with potential side effects of capital flows. The Central Bank of the Republic of Turkey (CBRT) introduced the asymmetric interest rate corridor. This chapter investigates whether interest rate volatility, under the interest rate corridor, can tame capital flows. The results reveal that the average funding rate has a significant impact on capital flows. On the other hand, uncertainty in monetary policy conditions can mitigate capital inflow surges during risk-off periods. The third chapter examines the impact of complexity of monetary policy communication on financial markets. Central banks' decisions can create volatility in financial markets. In addition, the arguments underlying these decisions can distort the markets. This chapter focuses on the alternatives that central banks can adopt to reduce the volatility of financial markets stemming from their decisions. Postponement of publication and usage of clear language are the options to be tested. The study focuses on the minutes released by the Bank of England. The results imply that these solutions do not provide a panacea for lowering volatility in the stock market, exchange rates or interest rates.