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Dynamic Interactions Between Monetary Policy, Real Sector Confidence, Capacity Utilization, and Foreign Trade: Evidence from Türkiye

Year: 2026

Type: article

Abstract: This study examines the dynamic relationships between monetary policy, real sector confidence, capacity utilization, and foreign trade in Türkiye using a Structural Vector Autoregression (SVAR) model based on monthly data from the period 2013:01-2025:08.The findings reveal that monetary policy shocks significantly affect real sector confidence, production capacity, and trade performance through expectation and supply channels.Increases in policy interest rates lead to short-term declines in confidence and capacity utilization, followed by a delayed and weaker impact on trade volume.The effects are short-lived and diminish within nine months, confirming the temporary nature of monetary policy transmission.The study contributes to the literature by combining these key macroeconomic variables within a single analytical framework.Policy recommendations emphasize the importance of developing early warning mechanisms for expectation management, monetary-fiscal coordination, and real sector dynamics.

Source: Journal of Economic Integration

DOI: 10.11130/jei.2025030

Author: ELIF MERYEM YURDAKUL ŞİPAL

Institution: Adnan Menderes University

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: diamond

OpenAlex ID: W7148629898