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Price Rigidity In Turkey : Evidence From Micro Data

Listed author(s):
  • M. Utku Ozmen
  • Orhun Sevinc

In this study we investigate the duration of consumer price spells and the price change patterns for Turkey. The study employs the most comprehensive unofficial micro price data so far for Turkey covering around 6000 items over four years which comprises a major part of the Consumer Price Index (CPI). In detail, we analyze how long a typical price spell lasts, the average size of price changes, the relationship between price change size and spell duration, distribution of price changes and synchronization of prices. Compared to advanced economies, we estimate a high frequency of consumer price changes in Turkey. Findings suggest substantial heterogeneity among sub-groups and underline the time-varying nature of frequency and synchronization indicators. The study confirms that the empirical regularity of mixed evidence of both state and time-dependent pricing generally cited for developed economies also holds for an emerging market economy, Turkey.

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Paper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1125.

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Date of creation: 2011
Handle: RePEc:tcb:wpaper:1125
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