Normalization of Monetary Policy After Global Crisis: What is Normalization?

Year 2017, Volume: 1 Issue: 3, 164 - 175, 31.10.2017

Nurhan Hande Sevgi

https://doi.org/10.25295/fsecon.363764

Abstract

Global
financial crisis was not only created a chaos but also changed the contemporary
monetary policy. The global economy faced with a shift on policy tools because
by starting the liquidity trap that American economy faced forced the
authorities to find new strategies. Policy makers have started to consider
financial stability with price stability and to reshape monetary policy they
created new policy tools.

 

The descried
tools for new exit ways of powerful central banks especially Fed, helped to
overcome the global crisis while bringing new issues. Under the circumstances Fed
started a normalization process for monetary policy. Due to the gravity of Fed,
other central banks had to adopt the current stream. In this conjuncture
Central Bank of the Republic of Turkey has changed the policy tools
correspondingly. The purpose of this paper is to evaluate the change in the monetary
policy path of Fed and ECB with the behavioral pattern of Central Bank of the
Republic of Turkey with “New Normalization” concept.

Keywords

Monetary Policy, Central Bank, Unconventional Monetary Tools

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