Inflation Dynamics in Turkey : A Historical Accounting

[EN] This study investigates the key drivers of consumer inflation in Turkey during the inflation targeting period covering 2006-2016. We estimate a reduced-form time-varying parameter (TVP) Phillips curve for core inflation, defined as CPI excluding unprocessed food, alcoholic beverages and tobacco. TVP estimates suggest that there is a clear decline in import price pass-through in recent years whereas pass-through from exchange rates to domestic inflation is relatively stable. Using this setup, we compute the contribution of macro variables such as exchange rate, import prices, output gap and real unit wages to inflation. We document the changes in inflation dynamics over the past decade, particularly focusing on the two distinct episodes of inflation targeting in terms of monetary policy implementation and discuss implications for price stability. Overall, our results suggest that achieving price stability requires a holistic approach embedding both cyclical and structural policies. [TR] Bu calismada Turkiye’de uygulanmakta olan enflasyon hedeflemesi rejiminin 2006-2016 yillarini kapsayan donemi icin enflasyonun temel makro belirleyicileri incelenmektedir. Parametreleri zamana gore degisen bir Phillips egrisi tahmin edilerek elde edilen bulgular, ithalat fiyat geciskenliginin son yillarda azaldigina, doviz kuru geciskenliginin ise goreli olarak daha istikrarli seyrettigine isaret etmektedir. Bu yaklasim kullanilarak, doviz kuru, ithalat fiyatlari, cikti acigi ve reel birim ucret gibi makro degiskenlerin enflasyona katkisi hesaplanmaktadir. Calismada ayni zamanda enflasyon hedeflemesinin iki farkli alt donemi ele alinarak degisen enflasyon dinamikleri irdelenmekte ve politika cikarimlari yapilmaktadir. Bulgularimiz, fiyat istikrarina ulasmak icin konjonkturel ve yapisal politikalarin bir arada ele alindigi butuncul bir yaklasimin onemine isaret etmektedir.