OPEN ECONOMIES REVIEW, vol.22, no.4, pp.649-667, 2011 (SSCI)
Article / Article
OPEN ECONOMIES REVIEW
Social Sciences Citation Index (SSCI), Scopus
Liquidity effect, Open economy version of NBR, Small and open economies, VAR models, REAL EXCHANGE-RATE, AGNOSTIC IDENTIFICATION, MONEY, OUTPUT, INCOME, TRANSMISSION, COUNTRIES, PRICES
Ankara Haci Bayram Veli University Affiliated:
This paper proposes a new liquidity measure for a small open economy. The new measure includes the net liquidity provided to the system by a central bank after accounting for the central bank's involvement in the foreign exchange market. Empirical evidence gathered from Turkey suggests that a positive innovation in liquidity increases output temporarily and that its effect on prices, exchange rate and money are permanently higher.