Ankara : The Department of Economics, İhsan Doğramacı Bilkent University, 2013.Thesis (Master's) -- Bilkent University, 2013.Includes bibliographical references.This thesis aims to figure out an optimal combination of monetary policy tools
and macroprudential tools in order to maintain both financial stability and
price stability. In particular, given that monetary policy authority already
considers loan growth in its objective function, it asks whether an additional
macroprudential tool, a loan tax, is welfare-improving. For this purpose, it
constructs a simple New Keynesian Model with capital and banking sector.
By incorporating loan growth in a loss function, monetary policy authority
chooses the optimum weights and derives a Taylor-type interest rate rule,
which could be also called as leaning against the credit winds. Then, it
adds an endogenous tax rule and compares the minimum mean values of loss
function. The result of simulations suggest that a tax rule that responses to
deviations from steady state value of growth, inflation and loan growth leads
lower loss values, thus, the inclusion of tax in the policy rule set is welfareimprovingÇelik, ŞivaM.S
