MONETARY POLICY AND STOCK MARKET MOVEMENTS IN TURKEY (original) (raw)

In this dissertation, we investigate the hypothesis that monetary policy responds tomovements in asset prices.In the study the arguments in favor and against the above hypothesis will be studied, the empirical framework will be discussed and the hypothesis will be tested. In theinvestigation, we adopt the Taylor rule as the empirical framework and used its standard andaugmented versions in order to reach a conclusion.In this study, we will especially explore thatwhether the stock market movements play a crucial role in shaping monetary policy either directlyor indirectly in Turkey between the years 1997 and 2012.