ABSTRACT More than a century has passed since the collapse of the Ottoman Empire and the establishment of the Republic of Turkey. The early Republic faced some of the most challenging economic periods. This study examines the Central Bank of the Republic of Turkey’s (CBRT’s) monetary measures and their relationship with macroeconomic performance between 1933 and 1939. Using panel data and correlation heatmap analyses, the findings reveal strong positive relationships among gross domestic product (GDP), CBRT’s monetary assets, liabilities, and gold reserves, suggesting that asset management supported economic growth. Price stability was a critical factor because rising price levels are correlated with slower growth and lower CBRT profits. The results highlight the role of the CBRT in balancing growth, liquidity, and stability during the formative years of Turkey’s financial system, offering a promising outlook for the future. JEL Classifications: M40; M48.
Pekdemir et al. (Fri,) studied this question.