IDEAS home Printed from https://ideas.repec.org/p/tcb/econot/1703.html
   My bibliography  Save this paper

Inflation Dynamics in Turkey : A Historical Accounting

Author

Listed:
  • A. Hakan Kara
  • Fethi Ogunc
  • Cagri Sarikaya

Abstract

[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.

Suggested Citation

  • A. Hakan Kara & Fethi Ogunc & Cagri Sarikaya, 2017. "Inflation Dynamics in Turkey : A Historical Accounting," CBT Research Notes in Economics 1703, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:econot:1703
    as

    Download full text from publisher

    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/bbff9d3a-f0dc-462c-8c62-c3eb19e09109/en1703eng.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE-bbff9d3a-f0dc-462c-8c62-c3eb19e09109-m3fw5t2
    Download Restriction: no

    Citations

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


    Cited by:

    1. Yakup Kutsal Koca & Tuba Yilmaz, 2018. "A Closer Look at Core Inflation Dynamics with a Historical Perspective," CBT Research Notes in Economics 1807, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

    More about this item

    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:econot:1703. 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: (). General contact details of provider: http://edirc.repec.org/data/tcmgvtr.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.