Acceso usuarios
Yasin Akcelik, Orcan Cortuk, Ibrahim Turhan
We study the trilemma configuration of the Turkish economy for the period 2002–11. This includes calculating the trilemma indices and regressing them on a constant following Aizenman et al. (2008). Yet we extend this approach by applying a Kalman filter to the classical linear regression to capture the time-varying importance of policy decisions. Next, we reveal the role of central bank foreign reserves and required reserves in mitigating trilemma tradeoffs through their relation with trilemma residuals in a vector autoregression (VAR) framework—we show that the foreign reserves to GDP ratio and the required reserve ratio have a positive significant impact on the residuals, thus making the policy tradeoffs smaller
