The Impacts of Selected Monetary Policy Indicators on Employment: The Case of Türkiye

The relationship between monetary policy and employment is a frequently discussed topic in the economics literature. The recent global pandemic necessitated a new evaluation for monetary policy-employment nexus to reveal potential changes in dynamics. This study, prepared to address this emerging need, investigated the impact of monetary policy instruments on employment in the Türkiye economy for the period 2013Q1-2024Q1. In the study, which takes the global pandemic into account, unit root analysis, the Augmented Autoregressive Distributed Lag (ARDL) Bounds Test, and the Error Correction Model (ECM) methods were used to obtain empirical evidence. According to the results, while M3 money supply, rediscount rate, and repo transactions significantly influenced employment in the reference period, no significant relationship was found with the funding cost. Additionally, the Covid-19 crisis had a significant impact on employment. Based on these findings, it has been concluded that the Turkish economy needs interventionist policies regarding employment within certain criteria. Therefore, effective economic policies, the monitoring of policy transmission mechanisms, and permanent legal regulations that protect the workers are recommended against unexpected economic shocks.