Would "Cold Turkey" Work in Turkey?
When inflation rates in a country are persistently high, observers often believe that the inflation process has become "inertial," posing an obstacle to disinflation. Using an innovative approach, we assess the empirical validity of this argument for the case of Turkey. We find that the current degree of inflation persistence in Turkey is lower than in Brazil and Uruguay prior to their successful stabilization programs. More significantly, expectations of future inflation are more important than past inflation in shaping the inflation process, providing little evidence of "backward-looking" behavior. Using survey data, we find that inflation expectations, in turn, largely depend on the evolution of fiscal variables.
Volume (Year): 51 (2004)
Issue (Month): 3 (November)
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/|
|Order Information:|| Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK|
Web: http://www.palgrave-journals.com/pal/subscribe/index.html Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Galí, Jordi & Gertler, Mark, 1999. "Inflation Dynamics: A Structural Economic Analysis," CEPR Discussion Papers 2246, C.E.P.R. Discussion Papers.
- Metin, Kivilcim, 1998. "The Relationship between Inflation and the Budget Deficit in Turkey," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(4), pages 412-22, October.
- Aykut Kibritcioglu, 2001.
"Causes of Inflation in Turkey: A Literature Survey with Special Reference to Theories of Inflation,"
0107002, EconWPA, revised 10 Oct 2001.
- Aykut Kibritcioglu, 2001. "Causes of Inflation in Turkey: A Literature Survey with Special Reference to Theories of Inflation," Economics Bulletin, AccessEcon, vol. 28(21), pages A0.
- Laurence Ball, 1993.
"What Determines the Sacrifice Ratio?,"
NBER Working Papers
4306, National Bureau of Economic Research, Inc.
- Jeff Fuhrer & George Moore, 1993.
Finance and Economics Discussion Series
93-17, Board of Governors of the Federal Reserve System (U.S.).
- Fuhrer, Jeff & Moore, George, 1995. "Inflation Persistence," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 127-59, February.
- Jeff Fuhrer & George Moore, 1993. "Inflation persistence," Proceedings, Federal Reserve Bank of San Francisco, issue Mar.
- Jeff Fuhrer & George Moore, 1993. "Inflation persistence," Proceedings, Board of Governors of the Federal Reserve System (U.S.).
- Steinar Holden & John C. Driscoll, 2001.
"A Note on Inflation Persistence,"
NBER Working Papers
8690, National Bureau of Economic Research, Inc.
- Guy Meredith & Bankim Chadha & Paul R. Masson, 1991.
"Models of Inflation and the Costs of Disinflation,"
IMF Working Papers
91/97, International Monetary Fund.
- Esteban Jadresic, 2000. "Can Staggered Price Setting Explain Short-Run Inflation Dynamics?," Econometric Society World Congress 2000 Contributed Papers 0872, Econometric Society.
- Stanley Fischer & Ratna Sahay & Carlos A. VÃ©gh Gramont, 2002.
"Modern Hyper- and High Inflations,"
IMF Working Papers
02/197, International Monetary Fund.
- Durevall, Dick, 1999.
"Inertial inflation, indexation and price stickiness: evidence from Brazil,"
Journal of Development Economics,
Elsevier, vol. 60(2), pages 407-421, December.
- Durevall, Dick, 1998. "Inertial Inflation, Indexation and Price Stickiness: Evidence from Brazil," Working Papers in Economics 8, University of Gothenburg, Department of Economics.
- Thomas J. Sargent, 1981.
"The ends of four big inflations,"
158, Federal Reserve Bank of Minneapolis.
- Jordi Gali & Mark Gertler, 2000.
"Inflation Dynamics: A Structural Econometric Analysis,"
NBER Working Papers
7551, National Bureau of Economic Research, Inc.
- Gali, Jordi & Gertler, Mark, 1999. "Inflation dynamics: A structural econometric analysis," Journal of Monetary Economics, Elsevier, vol. 44(2), pages 195-222, October.
- Jordi Galí & Mark Gertler, 1998. "Inflation dynamics: A structural econometric analysis," Economics Working Papers 341, Department of Economics and Business, Universitat Pompeu Fabra.
- Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
- Ghezzi, Piero, 2001. "Backward-looking indexation, credibility and inflation persistence," Journal of International Economics, Elsevier, vol. 53(1), pages 127-147, February.
- C. Emre Alper & Murat Ucer, 1998. "Some Observations on Turkish Inflation: A ''Random Walk'' Down the Past Decade," Working Papers 1998/02, Bogazici University, Department of Economics.
- Robert J. Shiller, 1997. "Public Resistance to Indexation: A Puzzle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 159-228.
- Andrews, Donald W K, 1993. "Exactly Median-Unbiased Estimation of First Order Autoregressive/Unit Root Models," Econometrica, Econometric Society, vol. 61(1), pages 139-65, January.
- Buiter, Willem H. & Grafe, Clemens, 2001. "No Pain, No Gain? The Simple Analytics of Efficient Disinflation in Open Economies," CEPR Discussion Papers 3038, C.E.P.R. Discussion Papers.
- Laura Papi & G. C. Lim, 1997. "An Econometric Analysis of the Determinants of Inflation in Turkey," IMF Working Papers 97/170, International Monetary Fund.
- Roberts, John M, 1995. "New Keynesian Economics and the Phillips Curve," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(4), pages 975-84, November.
When requesting a correction, please mention this item's handle: RePEc:pal:imfstp:v:51:y:2004:i:3:p:493-509. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniel Foley)
If references are entirely missing, you can add them using this form.