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Crude Oil Price Pass-Through to Domestic Prices in Turkey: Asymmetric Nonlinear ARDL Approach

Author

Listed:
  • Harun Öztürkler

    (Kırıkkale University, Department of Econometrics)

  • Fatih Demir

    (Kırıkkale University, Department of Econometics)

  • Serhat Yılmaz

    (Kırıkkale University, Department of Econometics)

Abstract

Increasing World population leads to an ever-rising energy need. For every individual in the economic activity and sector the most important energy resource is oil and oil products. Oil is also one of the most important items in the trade between countries. Turkey is a mostly energy dependent country, and this dependency is also the case for oil and oil products. As it is the case for those countries with significant energy dependency, oil price is important for economic stability in Turkey. The effects of oil price on macroeconomic variables are discussed frequently in the related literature. There are empirical studies in the literature investigating the differing effects of oil price rise and fall on economic activity. Some of these studies conclude that the effect is asymmetric. On the other hand, there is no consensus in the literature about the causes of asymmetric price pass-though. This study aims at determining the effects of oil price changes on the inflation in Turkey and whether price pass-through symmetric or asymmetric.

Suggested Citation

  • Harun Öztürkler & Fatih Demir & Serhat Yılmaz, 2015. "Crude Oil Price Pass-Through to Domestic Prices in Turkey: Asymmetric Nonlinear ARDL Approach," EY International Congress on Economics II (EYC2015), November 5-6, 2015, Ankara, Turkey 256, Ekonomik Yaklasim Association.
    • Handle: RePEc:eyd:cp2015:256
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    More about this item

    Keywords

    Oil Price; Asymmetric Price Pass-Through; Asymmetric ARDL; Turkey;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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