Monetary policy strategies applied in controlling inflation in Turkey and their effects

This study aims to compare the inflation targeting strategy that has been applied by Central Bank of Turkey since 2002 with alternative monetary policy strategies previously employed. The effects of inflation and the relation between inflation and money supply, exchange rate and interest rate indicators of the term when inflation targeting strategy was applied were discussed in the study. In this way, it was aimed to determine to what extent the monetary policy and monetary policy indicators were decisive to achieve general economic stability upon inflation targeting was adopted. The aim of the study is to prove that "inflation targeting regime is the most effective strategy on monetary policy". In the study, the term of 1980-2001 was named as the term before inflation targeting and the term of 2002-2014 was named as inflation targeting term. In this context, a general opinion was suggested via stating former empirical studies while examining the term before 2002. The developments of the term after 2002 were evaluated with Vector Auto Regression (VAR) and a comparison was made between two terms accordingly.