The Effects of Economic Policies in Turkey: An Application for the Period After 2000

Abstract

Abstract. The main objective of the study is to analyze the effects of economic policies implemented in Turkey for the period after 2000. Therefore, firstly the theoretical and empirical literature has been done for economic policies, and then an econometric analysis was conducted to determine the effects of economic policies on macroeconomic indicators and the relationship between with each other. The study consists of three parts. In the first part, general information about economic policies is presented and some definitions were made. In the second part, theoretical debates for economic policies and macroeconomic models in open economy were examined. In the third section, the historical development of economic policies implemented in Turkey economy and empirical literature was reported and a general assessment has made with the findings obtained by using the VAR method. The results obtained from this study can be summarized as follows: monetary policy overrides about solving the inflation problem in Turkey economy in the period after 2000 but fiscal policy is more effective than monetary policy on the real economy. Additionally, a substituent feature between monetary and fiscal policy was appeared and it was observed that monetary policy located in a position following fiscal policy in terms of Turkey economy. Keywords. Monetary policy, Fiscal policy, Turkey, VAR Analysis. JEL. E52, E62, O53, C01.