The Central Bank of Turkey goes to Washington
Or actually the U.S. would be better, as they seem to be pondering into other Eastern cities as well, but I wanted my movie homage 
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Anyway, the Central Bank of Turkey’s top brass is in the U.S. for the IMF-WB meetings, and they are not shy at sharing their views at all. Three presentations appeared on the Bank’s website yesterday, two by Governor Erdem Basci, and one by Deputy Governor Ibrahim Turhan, who was seen as the second likely to candidate, after Basci, to be elected Governor.
Basci’ first presentation is a summary of the Central Bank’s monetary policy. There is nothing new there for a seasoned Turkey follower, but I loved the policy stance summary on slide 12: The policy rate is accommodative, but liquidity policy and financial sector policy are non-accommodative, so net policy stance is non-accommodative. I did not know you could add up different policies like that, but as they say, you learn something new everyday.
Basci’s second presentation at the NBER conference is more technical & academic. There is some monetary policy bit, but most of it is about a paper he wrote with two colleagues at the Bank. The main idea, which I first stumbled upon at the Governor’s presentation in Denizli in July, is that an interest rate spread shock affects the permanent income expectations of both lenders & borrowers and therefore has significant impact on the real sector. In the paper, Basci & co. relate this fact to the relationship between corporate CDSs and unemployment in the U.S. In the presentation, Basci provides similar graphs for other countries, although I am not sure he and his colleagues have done formal empirical tests for those.
Finally, once-Governor-hopeful (at least, according to the Turkish press) Turhan’s presentation in the Big Apple is about Turkey’s economic role in the Balkans. It has a lot of interesting charts comparing Turkey to Balkan countries, including the the now-almost-bankrupt Greece, but it is not really about Turkish monetary policy at all.
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