THE EFFECTS OF CENTRAL BANK INDEPENDENCE ON REAL AND POTENTIAL ECONOMIC GROWTH: THE CASE OF TURKEY (1970-2015)
MERKEZ BANKASI BAĞIMSIZLIĞININ REEL VE POTANSİYEL EKONOMİK BÜYÜME ÜZERİNDEKİ ETKİLERİ: TÜRKİYE ÖRNEĞİ (1970-2015)

Author : Ömer YALÇINKAYA
Number of pages : 175-201

Abstract

In this study, the effects of the level of statutory independence of the central bank on output gap which is defined as the difference between real and potential economic growth with real and potential economic growth in the Turkish economy are examined empirically within the time series analysis for the period 1970-2015. In the study from this aspect, it is aimed to econometrically assess that the long-term effects of the level of statutory independence established for the maintenance and sustainability of price stability which is the ultimate goal of the Central Bank of the Republic of Turkey (CBRT) on the real and potential economic growth performances of the Turkish economy. As a result of the study, it has been determined that the level of statutory independence of the CBRT does not has any influence on the real economic growth performance of the Turkish economy, has increased the potential economic growth performance and has reduced the output gap by narrowing the deficit between real and potential economic growth during the review period. These results reveals that with the current structure the level of statutory independence of the CBRT's in the working period has an important effect on the potential of the economic growth performance of the Turkish economy has been increased and has been gained sustainability at a potential level especially in the long term.

Keywords

Sustainable Economic Growth, Central Bank Statutory Independence Level, Turkish Economy, CBRT, Time

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