Monetary and fiscal policies in Turkey complement and substitute 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 tend to support each other when facing changes in demand and supply, but they act as substitutes when reacting 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 the variables and restrictions.