Cataloged from PDF version of article.The empirical evidence suggests that openness decreases the effect of monetary
policy on output; however the effect on prices is not statistically significant. In the first
chapter of this research these predictions are tested over the open economy of Turkey for
quarterly data from 1987:1 to 2001:1. This chapter assesses how the openness affects the
effectiveness of monetary policy on output and prices.
The purpose of the second chapter is to assess if expansionary and
contractionary government spending shocks have an asymmetric effect for Turkish
economy. There might be asymmetry for the effect of fiscal policy on economic
outcome due to stickiness of prices, perception of changes (permanent versus
transitory) and nearness to full employment. This chapter assesses this asymmetry for
Turkey by using quarterly data from 1987:I to 2001:I. The empirical evidence reported
here reveals that private consumption and investment decrease in the face of
expansionary government spending shocks; however, they either do not change or
decrease very little under contractionary government spending shocks.Doğan, BurakM.S