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

OpenAlex İngilizce

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.