REFLECTIONS OF MONETARY TRANSMISSION MECHANISM ON HOUSEHOLD BALANCE SHEETS: THE CASE OF TURKEY

The monetary transmission mechanism includes applications that aim to direct aggregate demand using various channels on the policy rate axis, with the ultimate goal of price stability. As an important component of national balance sheets, households, which are economic actors, stand out among the addressees of the monetary transmission mechanism with their perspective on aggregate demand. In this study, households are addressed in terms of economic actors, and the question of to what extent households are affected by monetary transmission mechanism applications is sought. The monetary transmission mechanism is monitored through policy rates, nominal exchange rates and CPI values to represent the financial conditions created. In order to quantify the economic actor dimension of households, household balance sheets are used. Since a data set in the form of household balance sheets is not reported by data centers in Turkey, a balance sheet estimate is made by consolidating the account items forming the balance sheet in line with the information obtained from various data sources. The study covers the historical period of 2014-2024 and in line with 3 different econometric models created within the scope of Johansen cointegration test, it has been determined that inflation rates shaped by nominal exchange rate and interest rates are determinant on household balance sheets.