Recent Papers

Global Corporate Bond Markets and Local Monetary Policy Transmission [pdf]

Abstract: When tight monetary policy curtails domestic supply of credit and raises domestic borrowing costs, firms that tap foreign bond markets to obtain cheaper funding can isolate themselves from contractionary effects of monetary tightening. I investigate whether this prediction holds for euro area non-financial companies. I first show that euro area firms exploit borrowing cost differential between USD and EUR by issuing corporate bonds in USD whenever it becomes cheaper to do so. Using proxies for such opportunistic borrowing behavior, I then find that firms that can borrow opportunistically in global corporate bond markets do not reduce their fixed capital investment as much as other firms in response to monetary tightening. Additional results reveal that this differential firm response is driven by cost-saving opportunities of issuing in global corporate bond markets and not by other types of asymmetries of financial constraints between firms. Overall, these findings confirm that there is significant level of heterogeneity in firms’ reaction to monetary policy resulting from firms’ differential access to global corporate bond markets. They also suggest that local monetary policy transmission can be impaired when global financial markets offer cheaper funding opportunities to firms.

Presented at: EEA-ESEM 2022, Tri-City Day-Ahead Workshop on the Future of Financial Intermediation (poster), RES 2022 Symposium of Junior Researchers, 4th International Conference on European Studies, 14th Evolving Challenges in European Economies Conference, INFER Annual Conference 2022, ESSEC Student Research Seminar 2021 & 2022, Barcelona GSE Summer School on Empirical Tools/Applications in Banking and Macro-Finance 2021.

The Global Financial Cycle and State-Dependent Local Monetary Policy Transmission (in progress)

Are All Exchange Rate Depreciations the Same? (in progress)

Reverse Yankee Bond Issuance and Heterogeneous Monetary Policy Transmission in the US (with Özgen Öztürk, in progress)

Bank Lending Channel of Monetary Policy in an International Context (in progress)

Publications and Working Papers before PhD

Implicit Asymmetric Exchange Rate Peg under Inflation Targeting Regimes: The Case of Turkey (with Hasan Cömert), Cambridge Journal of Economics, vol. 40, 1553-1580. [Link]

Central Banking in Developing Countries after the Crisis: What Has Changed? (with Hasan Cömert), Chapter in Global South After Crisis, edited by Rex Mckenzie and Hasan Comert, Edward Elgar Publishing, Northampton, US. [Link]

2002 Sonrası Türkiye Ekonomisinin Performansı: Karşılaştırmalı Bir Analiz (with Hasan Cömert and Güney Düzçay) (in Turkish), METU Studies in Development, vol. 43, no.1, 65-110. [Link]

Asymmetric Exchange Rate Policy in Inflation Targeting Developing Countries (with Hasan Cömert and Nadir Öçal), IPE Working Papers 86/2017, Berlin School of Economics and Law, Institute for International Political Economy (IPE). [Link]

Global Constraints on Central Banking: The Case of Turkey (with Hasan Cömert), FESSUD Working Paper Series, no. 111.