Monetary and fiscal policies in Turkey complement each other in response to shocks.
The article explores how monetary and fiscal policies in Turkey work together in response to different economic shocks. By using a special model, the researchers found that these policies complement each other when dealing with changes in demand and supply, but act as substitutes when responding to shocks caused by each other. This shows that the type of shock matters in how these policies interact. The results were consistent even when using different definitions for variables and restrictions.