Unconventional Monetary Policies in Emerging Markets: Turkey's Experience Through the Lens of Synthetic Control

This study investigates the impact of the Central Bank of Turkey's (CBRT) unconventional monetary policy shift in 2021 particularly aggressive interest rate cuts on inflation and macroeconomic stability by applying the Synthetic Control Method (SCM).A synthetic counterfactual is constructed from countries with comparable macroeconomic characteristics to estimate what Turkey's inflation trajectory would have been in the absence of the policy change.The results reveal a sharp post-2021 inflation divergence between Turkey and its synthetic counterpart, suggesting that the surge in inflation was largely policy-induced.Placebo tests validate the statistical significance of the findings, while robustness checks confirm the stability of the results.