IDEAS home Printed from https://ideas.repec.org/p/tcb/wpaper/0808.html
   My bibliography  Save this paper

Monetary Pressures and Inflation Dynamics in Turkey: Evidence from P-Star Model

Author

Listed:
  • K. Azim Ozdemir
  • Mesut Saygili

Abstract

This paper uses the P-star model to explain inflation dynamics in Turkey. In P-star models, money plays an important role by determining the price gap, which is postulated to measure the pressure on prices in the economy. This pressure emerges when output is above the potential, interest rate is lower than the natural rate, or there exists some excess money in the economy. The estimation results with the Turkish data show that the price gap does indeed contain considerable information for explaining inflation dynamics. Moreover, the model selection criterion that compares the empirical performance of the P-star model with the New Classical Phillips curve relationship favors the P-star model over the Phillips curve relationship. We conclude that money is efficacious in predicting risk to price stability in Turkey

Suggested Citation

  • K. Azim Ozdemir & Mesut Saygili, 2008. "Monetary Pressures and Inflation Dynamics in Turkey: Evidence from P-Star Model," Working Papers 0808, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:0808
    as

    Download full text from publisher

    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2008/08-08
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tomislav Globan & Vladimir Arčabić & Petar Sorić, 2016. "Inflation in New EU Member States: A Domestically or Externally Driven Phenomenon?," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(1), pages 154-168, January.
    2. Lillian Kamal, 2014. "Do GAP Models Still have a Role to Play in Forecasting Inflation?," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 8(3), pages 1-12.
    3. Johannes VAN DER POL, 2016. "The modelling of networks using Exponential Random Graph Models: an introduction," Cahiers du GREThA (2007-2019) 2016-22, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    4. Johannes van Der Pol, 2017. "Introduction to network modeling using Exponential Random Graph models (ERGM)," Working Papers hal-01284994, HAL.
    5. K. Azim Özdemir & Mesut Saygılı, 2013. "Economic uncertainty and money demand stability in Turkey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 40(3), pages 314-333, July.
    6. Cuneyt Dumrul & Yasemin Dumrul, 2015. "Price-Money Relationship after Infl ation Targeting: Co-integration Test with Structural Breaks for Turkey and Brazil," International Journal of Economics and Financial Issues, Econjournals, vol. 5(3), pages 701-708.
    7. ali, ramsha, 2016. "Impact of inflation on the monetary policy: case study of Pakistan," MPRA Paper 92362, University Library of Munich, Germany.
    8. Emel Siklar & Ilyas Siklar, 2021. "Is There a Change in the Money Demand Stability in Turkey? A Nonlinear Approach," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 7(2), pages 28-42, 06-2021.
    9. Ari, Ali & Yılmaz, Ahmet & Cergibozan, Raif & Ozcan, Yunus, 2013. "The Inflation Dynamics of the Turkish Economy in 1990-2011 Period," MPRA Paper 95675, University Library of Munich, Germany.

    More about this item

    Keywords

    Money Demand; P-star; Inflation Dynamics;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tcb:wpaper:0808. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sermet Pekin or Ilker Cakar or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/tcmgvtr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.