On the Role of Financial Stress in the Transmission of Monetary Policy
On the Role of Financial Stress in the Transmission of Monetary Policy

Summary/Abstract: This paper examines the asymmetric impact of monetary policy shocks on real output growth considering the role of financial stress. We carry out our examination using monthly Turkey data over 1998:M1 and 2012:M12 and apply a threshold vector autoregression model. Our investigation presents evidence that the impact of monetary policy shocks on output growth is stronger during high financial stress periods. However, it is found that there is no sign asymmetry in the real effects of monetary policy shocks.

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