An Econometric Analysis of the Determinants of Inflation in Turkey

Author/Editor:

G. C. Lim ; Laura Papi

Publication Date:

December 1, 1997

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

High and variable inflation has been a central feature of the Turkish economy since the 1970s. This paper seeks to shed some light on the determinants of inflation in Turkey by analyzing price determination within the framework of a multi-sector macroeconomic model during 1970–95. The main findings are that monetary variables (initially money, more recently the exchange rate) play a central role in the inflationary process, that public sector deficits contribute to inflationary pressures, and that inertial factors are quantitatively important. Policymakers’ commitment to active exchange rate depreciation on several occasions in the past 15 years has also contributed to the inflationary process.

Series:

Working Paper No. 97/170

Subject:

English

Publication Date:

December 1, 1997

ISBN/ISSN:

9781451858389/1018-5941

Stock No:

WPIEA1701997

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

33

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