Factors Influencing Relative Price of Goods and Services Sectors in Turkey : An Econometric Analysis
AbstractUpon difficulties faced by the Central Bank of Turkey (CBT) in attaining inflation targets, diverging movements in goods and services sectors prices, two components of the CPI basket, have drawn particular attention. However, studies on this issue have remained rather limited in developing as well as advanced countries. The present study is an attempt, despite limited availability of studies in the relevant literature and scant data relating to the sector of services, to clarify the issue by a VEC model. Relative price movements were explained by economic factors including inter-sectoral productivity differences, transmission from exchange rate, exposure to global competition and higher income elasticity of services sector. Our empirical study concluded that there is a long-term relationship between relative price series and economic factors recognized in literature. It was found that exchange rate and differences in productivity levels have significant share in accounting for relative price movements.
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Bibliographic InfoPaper provided by Bilkent University, Department of Economics in its series Departmental Working Papers with number 0901.
Date of creation: 2009
Date of revision:
Other versions of this item:
- Kıvılcım METİN-ÖZCAN & Koray KALAFATCILAR, 2009. "Factors influencing relative price of goods and services sectors in Turkey: An econometric analysis," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 24(285), pages 48-72.
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-19 (All new papers)
- NEP-ARA-2009-09-19 (MENA - Middle East & North Africa)
- NEP-CWA-2009-09-19 (Central & Western Asia)
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- Yilmaz Akdi & Koray Kalafatcilar & Kivilcim Metin-Ozcan, 2010. "Application of Periodogram-Based Cointegration Test for the Analysis of the Services and Goods Sector Inflations," International Econometric Review (IER), Econometric Research Association, vol. 2(1), pages 3-10, April.
- Akhmedjonov, Alisher & Lau, Chi Keung, 2012. "Do energy prices converge across Russian regions?," Economic Modelling, Elsevier, vol. 29(5), pages 1623-1631.
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