A closer look at the money multipliers for the Turkish economy: Is there a stable relationship?

This paper examines whether the money multiplier processes in the Turkish economy is stable and can be forecasted. Research results using quarterly frequency data for the 1987Q1 – 2009Q4 investigation period show that the processes which convert the base money supply aggregates into the final monetary aggregates are unstable and tend to decrease the effectiveness of policies pursued by the monetary authorities. Such a result do not attribute credibility to the traditional Monetarist prescriptions for the conduct of the monetary economic policies in the Turkish economy