Processing of Bank Lending Channel in Turkey: An Empirical Analysis

In this study, processing of bank lending channel in turkey was tested with the help of vector auto regression (var) method by using 1990:01-2008:11 period monthly data. processing of bank lending channel was investigated on the basis of two different monetary policy variables. according to the empirical findings of the study, on the contrary overnight interest rate, money supply was found to be a more effective monetary policy variable. in case of controling money supply, central bank can operate effectively bank credit channels and therefore the amount of output and inflation is going to be directed more easily. in this context it can be said that the processing of the bank lending channel is effective in turkey.