Abstract:

Particularly in the recent years there has been an increasing number of studies dealing with the monetary transmission mechanism that refers to the impact of the monetary policies adopted by the monetary authorities on the macroeconomic variables The detailed information on the monetary transmission mechanism is of great importance for the success of monetary policy The monetary transmission mechanism has initially dealt with the changes in money supply and interest rate The way that monetary policy influences the economy through the interest rate channel consists of only money and bond as explained in the Keynesian IS LM model Unlike the traditional interest channel there are three elements namely money financial securities and bank credits that have been considered in the bank lending channel The aim of this study is to examine the bank lending channel in Turkey Using data for the 1990:Q1 2010:Q4 period the study is to test the validity of the model by using VAR method A VAR model is constructed and the results of the impulse response functions are provided The findings of the study show that the bank lending channel in Turkey partially works Key Words: Monetary Transmission Mechanism Bank Lending Channel VAR Model

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