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---

### I. Introduction and Key Dynamics
- Türkiye transitioned from a period of high inflation: inflation surged to 85 percent y/y in late 2022, up from under 20 percent y/y before September 2021.
- Goods and services inflation exhibited different magnitudes and timing:
  - Goods inflation initially surged with sharp exchange rate depreciation and falling real interest rates, then declined toward the end of 2022 as the lira stabilized.
  - Services inflation rose more steadily, lagged goods inflation, did not decline with exchange rate stabilization, outpaced goods inflation, and exhibited greater persistence.
- Monetary policy and exchange rate developments:
  - A policy shift since mid-2023 gradually increased the repo rate from 8.5 to 50 percent within less than a year by March 2024.
  - A stable lira helped contain further increases in sequential inflation after summer 2023, but sequential (m/m) inflation remained higher than expected and relatively sticky, mainly due to services inflation.

### II. Changing Composition of Inflation
- Services became the dominant driver of inflation in recent years:
  - Contribution of services to overall inflation increased from around 6 percentage points (pp) in September 2021 to 31pp in July 2024.
  - Services accounted for under 40 percent in the CPI basket but contributed to 50-55 percent of headline inflation in 2024 and 2025, up from under 30 percent in late-2021 — the highest contribution of services inflation in Türkiye since 2010.
- Rental services and other service components:
  - Rental services account for around 13 percent of the services basket.
  - Rental contribution: under 5 percent to total service inflation in Jan 2022, rising to over 25 percent by the end of 2024.
  - Rental inflation reached 120 percent y/y in summer 2024; since then the 25 percent rent increase cap was lifted.
  - Broad-based increases across hospitality services, housing-related energy services, and other services (education, health, communication, transportation).
  - Rents, hospitality, and energy-related housing services each contributed between 5–6 pp to headline inflation toward the end of 2024.
- Administered prices and subsidies:
  - Around 60 percent of the price of energy is subsidized for households; administered pricing and price controls (including a rental price cap until recently) likely kept services inflation lower than it would otherwise have been.

### III. Relative Price of Services: Cross-Country Context and Inertia
- Pandemic-driven shifts:
  - Across many countries, households rotated spending from goods during lockdowns toward services after the pandemic, shifting the composition of inflation toward services.
- Türkiye-specific divergence:
  - The relative price of services to goods in Türkiye increased by more since mid-2022 compared to other countries.
  - The relative price dropped when the lira depreciated significantly after 2021 (goods inflation surged), then rose sharply as the exchange rate stabilized from mid-2022 and continued rising through the policy tightening cycle due to falling goods inflation y/y and inertia in services inflation.
  - The relative price measure uses July 2022 = 100 as a reference in the source figures.
- Persistence and inflation inertia in Türkiye:
  - Services inflation persistence jumped up towards the end of 2021 following a large depreciation and has stayed relatively high until October 2024.
  - Since late 2021, inflation inertia in services has exceeded that of goods, contributing to a sharp rise in the relative price of services.
  - Prior to the policy easing cycle, services inflation persistence had been, on average, lower than persistence in goods inflation.
  - Forces other than policy shifts possibly affecting inflation inertia include: i) more backward looking households’ and corporates’ expectations in Türkiye, ii) specific regulations in selected markets, iii) staggered contracts, iv) backward looking indexation, v) administered prices and public wages growing in real terms.
- International divergence and comparators:
  - Core goods sequential inflation has recently been about twice its pre-pandemic average and around double that of the average of selected comparators.
  - Services sequential inflation has recently been over five times higher than the average of the comparators, reflecting a fivefold increase relative to its own pre-pandemic average.
  - Inflation inertia in recent years has been higher in Türkiye than in the average of selected comparators.
  - Services inflation inertia rose in Türkiye after 2018, and then again in 2022; in contrast, core goods inertia declined following the 2018 currency crisis, remained stable, and—since the exchange rate stabilization of 2022—appears lower than in comparators.
- Historical lessons on tackling inertia:
  - Price and wage controls can temporarily help credibility and “buy some time” but evidence suggests they cannot solve underlying credibility issues and are eventually circumvented.
  - Recommended strategy: switch from backward- to forward-looking indexation in a rules-based manner—adjust prices and/or wages at the beginning of a stabilization program according to a relevant measure of expected inflation and eliminate backward-looking indexation.
  - Country program evidence summarized includes Argentina 1991, Brazil 1994, Chile 1975, Israel 1985, and Peru 1990, where eliminating indexation and implementing rules-based measures were central to stabilization efforts.

### IV. Model, Identification, and Empirical Results
- Model and identification:
  - Baseline six-variable recursive identification scheme (all variables in annual rates except repo rate and unemployment gap): core services inflation, core goods inflation, unemployment gap, oil inflation, nominal exchange rate depreciation, repo rate.
  - Supply shocks identified by oil price variable; labor market tightness by the unemployment gap.
  - Goods inflation is assumed to impact services inflation with a lag.
  - System estimated as a recursive VAR; alternative ordering where exchange rate is determined subsequent to the repo rate is considered in robustness checks.
- Empirical results: pass-through and asymmetry (SVAR estimated monthly over January 2010–November 2024; orthogonalized IRFs to one percentage point shocks):
  - A 10pp depreciation shock to the exchange rate is estimated to lead to:
    - a lagged increase in goods inflation by around 5pp after 3 months,
    - a lagged increase in services inflation by around 1pp after 3 months.
  - Pass-through to cumulative price levels:
    - around 15 percent of cumulative exchange rate depreciation passes through into services prices within 3 months, and around 35 percent into goods prices within 3 months.
    - around 20 percent (services) and 45 percent (goods) by 6 months.
    - Pass-through is mostly complete by 6 months.
  - Services inflation response is fairly muted while core goods inflation responds faster and by more, but core goods inflation also reverses faster.
  - Exchange rate shocks have symmetric effects in this model (a depreciation described; appreciation would produce similar but sign-opposite effects).
- Time variation in pass-through:
  - Pass-through increased over time for both core goods and core services, but significantly more for core goods.
  - Estimates by subperiod:
    - 2010–19: exchange rate pass-through after six months was close to 15 percent for core services and 30 percent for core goods.
    - 2020–24: pass-through increased to around 25 percent for core services and around 60 percent for core goods.
  - The greater increase in pass-through into core goods suggests exchange rate stabilization has been significantly more effective for goods prices over time, contributing to greater persistence of services inflation relative to goods.
- Robustness and sensitivity:
  - Robustness exercises included alternative labor variables (minimum wage, unemployment rate), varying inertia lags from 3 to 6, using headline instead of core measures, alternative core services definitions, using nominal effective depreciation rate, using gas prices instead of oil, alternative recursive ordering, including money growth and credit growth, and including inflation expectations as a seventh variable with varied ordering.
  - Core results—fast and asymmetric effects of exchange rate shocks on services and goods inflation—remain broadly unchanged.

### V. Policy Implications and Recommendations
- Exchange rate stabilization alone is insufficient to fully address services inflation due to higher inertia and muted pass-through to services.
- Macroeconomic policies aimed at reducing inflation inertia and eliminating backward-looking indexation should complement a stable exchange rate during disinflation.
- A rules-based switch from backward- to forward-looking indexation for prices and wages at the start of stabilization programs is likely preferable to discretionary adjustments or price/wage controls.
- Addressing credibility and widespread backward indexation is critical for successful disinflation.

### Key Summary Statistics (Appendix)
- Core services inflation: Mean 19.7; Std. dev. 23.3; Min 2.7; Max 86.4 (Source: TurkStat)
- Core goods inflation: Mean 18.5; Std. dev. 18.5; Min 1.1; Max 79.7 (Source: TurkStat)
- Headline services inflation: Mean 20.8; Std. dev. 25.1; Min 3.6; Max 97.0 (Source: TurkStat)
- Headline goods inflation: Mean 21.0; Std. dev. 21.6; Min 4.1; Max 94.9 (Source: TurkStat)
- Unemployment gap: Mean -0.2; Std. dev. 1.2; Min -2.5; Max 2.8 (Source: TurkStat)
- Minimum wage inflation: Mean 28.1; Std. dev. 31.5; Min 7.9; Max 179.7 (Source: TurkStat)
- Money growth: Mean 33.2; Std. dev. 22.6; Min 2.8; Max 98.9 (Source: TurkStat)
- Credit growth: Mean 29.4; Std. dev. 15.0; Min -5.4; Max 69.2 (Source: TurkStat)
- Inflation expectations (12m): Mean 13.8; Std. dev. 10.7; Min 6.1; Max 45.8 (Source: TurkStat)
- Oil price inflation (lira): Mean 35.8; Std. dev. 58.9; Min -55.4; Max 227.3 (Source: IFS)
- Gas price inflation (lira): Mean 79.8; Std. dev. 216.0; Min -77.1; Max 1187.2 (Source: IFS)
- Nominal depreciation rate: Mean 24.8; Std. dev. 25.1; Min -10.3; Max 114.6 (Source: TurkStat)
- Repo rate: Mean 13.4; Std. dev. 11.4; Min 4.5; Max 50.0 (Source: TurkStat)

*Source: IMF Working Paper — Services Inflation and the Exchange Rate (content unit).*

### References .............................................................................................................

### wpiea2026006-source-pdf - References .............................................................................................................

### I. Introduction and Key Dynamics
- Türkiye transitioned from a period of high inflation: inflation surged to 85 percent y/y in late 2022, up from under 20 percent y/y before September 2021.
- Goods and services inflation exhibited different magnitudes and timing:
  - Goods inflation initially surged with sharp exchange rate depreciation and falling real interest rates, then declined toward the end of 2022 as the lira stabilized.
  - Services inflation rose more steadily, lagged goods inflation, did not decline with exchange rate stabilization, outpaced goods inflation, and exhibited greater persistence.
- Monetary policy and exchange rate developments:
  - A policy shift since mid-2023 gradually increased the repo rate from 8.5 to 50 percent within less than a year by March 2024.
  - A stable lira helped contain further increases in sequential inflation after summer 2023, but sequential (m/m) inflation remained higher than expected and relatively sticky, mainly due to services inflation.

### II. Changing Composition of Inflation
- Services became the dominant driver of inflation in recent years:
  - Contribution of services to overall inflation increased from around 6 percentage points (pp) in September 2021 to 31pp in July 2024.
  - Services accounted for under 40 percent in the CPI basket but contributed to 50-55 percent of headline inflation in 2024 and 2025, up from under 30 percent in late-2021 — the highest contribution of services inflation in Türkiye since 2010.
- Rental services and other service components:
  - Rental services account for around 13 percent of the services basket.
  - Rental contribution: under 5 percent to total service inflation in Jan 2022, rising to over 25 percent by the end of 2024.
  - Rental inflation reached 120 percent y/y in summer 2024; since then the 25 percent rent increase cap was lifted.
  - Broad-based increases across hospitality services, housing-related energy services, and other services (education, health, communication, transportation).
  - Rents, hospitality, and energy-related housing services each contributed between 5–6 pp to headline inflation toward the end of 2024.
- Administered prices and subsidies:
  - Around 60 percent of the price of energy is subsidized for households; administered pricing and price controls (including a rental price cap until recently) likely kept services inflation lower than it would otherwise have been.

### III. Relative Price of Services: Cross-Country Context
- Pandemic-driven shifts: Across many countries, households rotated spending from goods during lockdowns toward services after the pandemic, shifting the composition of inflation toward services.
- Türkiye-specific divergence:
  - The relative price of services to goods in Türkiye increased by more since mid-2022 compared to other countries.
  - The relative price dropped when the lira depreciated significantly after 2021 (goods inflation surged), then rose sharply as the exchange rate stabilized from mid-2022 and continued rising through the policy tightening cycle due to falling goods inflation y/y and inertia in services inflation.
- Note: The relative price measure uses July 2022 = 100 as a reference in the source figures.

### IV. Related Literature and Contribution
- Novel focus: This paper is the first to focus specifically on services inflation and the impact of the exchange rate (per the authors’ statement).
- Connections to existing literature:
  - Prior literature examines exchange rate pass-through to headline and core inflation, inflation persistence, and tradable vs non-tradable inflation responses.
  - Findings in past studies referenced include:
    - Alogoskoufis and Smith (1991): regime changes lead to rises in inflation persistence.
    - Taylor (2000): positive relationship between exchange rate pass-through and persistence of inflation.
    - Stock and Watson (2007) and Fischer et al. (2006): positive relations between exchange rate changes and inflation persistence in US and euro area.
    - Hobijn et al. (2019) and García-Cicco and García-Schmidt (2020): different responses of tradable and non-tradable consumer price inflation to exchange rate changes; tradable goods show higher pass-through.
    - Türkiye-specific pass-through estimates: Ogunc et al (2018) find 17 percent pass-through over 2 years to headline inflation; Kara and Ogunc (2012) estimate 17 percent in two years and around 15 percent in a year; Ozmen and Topaloglu (2017) find 17 percent to CPI and around 12 percent and 25 percent to core goods and services prices; Leigh and Rossi (2002) find 60 percent to wholesale prices and 45 percent to CPI.
- Paper’s empirical contributions:
  - Develops an alternate identification strategy in a parsimonious empirical model.
  - Estimates the model over historical periods and the volatile 2018–24 period.
  - Estimates differential pass-through to core services and core goods prices; core services inflation is defined as headline services inflation less energy and transport services inflation.

### V. Inflation Inertia and the Exchange Rate Channel: Türkiye Experience
- Exchange rate as a primary inflation driver in Türkiye:
  - Over 90 percent of imports are invoiced in foreign currency (60 percent in USD); exchange rate movements historically correlate highly with inflation.
- Post-2021 dynamics:
  - Since mid-2022, following a sharp depreciation at end-2021, the lira has been relatively stable (except summer 2023), moving monthly at a pace on average lower than sequential inflation.
  - Despite 18 consecutive months of policy tightening since mid-2023 until October 2024, sequential inflation did not follow a downward trend consistent with CBRT forecasts during 2024.
- Inflation inertia:
  - A simple measure of CPI inflation inertia suggests persistence increased since late 2021.
  - Historical pattern: inertia broadly constant until 2013, declined until 2016–17, then jumped up in 2018 and further at the end of the period covered in the source.

*Source: IMF Working Paper content provided in the input.*

### 2021. We now observe a gradual and slow decline since mid-2023, but its level remains high (Figure 5).

### Services Inflation and the Exchange Rate

### Persistence and Inflation Inertia in Türkiye
- Services inflation persistence jumped up towards the end of 2021 following a large depreciation and has stayed relatively high until October 2024.
- Since late 2021, inflation inertia in services has exceeded that of goods, contributing to a sharp rise in the relative price of services.
- Prior to the policy easing cycle, services inflation persistence had been, on average, lower than persistence in goods inflation.
- The lira was stabilized since mid-2022, suggesting that core services inflation could be less responsive to exchange rate stabilization than core goods inflation.
- Forces other than policy shifts possibly affecting inflation inertia include: i) more backward looking households’ and corporates’ expectations in Türkiye, ii) specific regulations in selected markets, iii) staggered contracts, iv) backward looking indexation, v) administered prices and public wages growing in real terms.

### International Divergence and Comparators
- Core goods sequential inflation has recently been about twice its pre-pandemic average and around double that of the average of selected comparators.
- Services sequential inflation has recently been over five times higher than the average of the comparators, reflecting a fivefold increase relative to its own pre-pandemic average.
- Inflation inertia in recent years has been higher in Türkiye than in the average of selected comparators.
- Services inflation inertia rose in Türkiye after 2018, and then again in 2022; in contrast, core goods inertia declined following the 2018 currency crisis, remained stable, and—since the exchange rate stabilization of 2022—appears lower than in comparators.

### Historical International Experience with Tackling Inflation Inertia
- Price and wage controls can temporarily help credibility and “buy some time” but evidence suggests they cannot solve underlying credibility issues and are eventually circumvented.
- Recommended strategy: switch from backward- to forward-looking indexation in a rules-based manner—adjust prices and/or wages at the beginning of a stabilization program according to a relevant measure of expected inflation and eliminate backward-looking indexation.
- Selected country programs and measures summarized:
  - Argentina 1991: currency board, prohibition of indexation clauses, wage agreements tied to productivity.
  - Brazil 1994: elimination of indexation in exchange, labor, and many contracts; pegged new currency to the dollar with a fixed maximum exchange rate.
  - Chile 1975: indexation mechanisms created inertia; PPP exchange rate rule and wage indexation were major sources of inertia.
  - Israel 1985: initial devaluation, exchange rate pegged, suspension of wage contracts (including indexation), a price freeze.
  - Peru 1990: public sector wage discipline, one-time large cost-of-living bonus, abolition of wage indexation in public enterprises, prices adjusted and later subject to smaller and more frequent adjustments.

### Model and Identification
- Aim: estimate the impact of exchange rate shocks on services and goods inflation specific to Türkiye.
- Baseline six-variable recursive identification scheme (all variables in annual rates except repo rate and unemployment gap): core services inflation, core goods inflation, unemployment gap, oil inflation, nominal exchange rate depreciation, repo rate.
- Supply shocks identified by oil price variable; labor market tightness by the unemployment gap.
- Goods inflation is assumed to impact services inflation with a lag.
- System estimated as a recursive VAR; alternative ordering where exchange rate is determined subsequent to the repo rate is considered in robustness checks.
- Equations summarized in structural form with variables ∆표t (oil price inflation), ∆ut (unemployment gap), ∆πt g (core goods inflation), ∆πt s (core services inflation), ∆et (nominal depreciation rate), it (repo rate) and associated shocks 휀t.

### Empirical Results: Pass-Through and Asymmetry
- SVAR estimated monthly over January 2010–November 2024; orthogonalized IRFs to one percentage point shocks.
- A 10pp depreciation shock to the exchange rate is estimated to lead to:
  - a lagged increase in goods inflation by around 5pp after 3 months,
  - a lagged increase in services inflation by around 1pp after 3 months.
- Pass-through to cumulative price levels:
  - around 15 percent of cumulative exchange rate depreciation passes through into services prices within 3 months, and around 35 percent into goods prices within 3 months.
  - around 20 percent (services) and 45 percent (goods) by 6 months.
  - Pass-through is mostly complete by 6 months.
- Services inflation response is fairly muted while core goods inflation responds faster and by more, but core goods inflation also reverses faster.
- Exchange rate shocks have symmetric effects in this model (a depreciation described; appreciation would produce similar but sign-opposite effects).

### Time Variation in Pass-Through and Recent Changes
- Pass-through increased over time for both core goods and core services, but significantly more for core goods.
- Estimates by subperiod:
  - 2010–19: exchange rate pass-through after six months was close to 15 percent for core services and 30 percent for core goods.
  - 2020–24: pass-through increased to around 25 percent for core services and around 60 percent for core goods.
- The greater increase in pass-through into core goods suggests exchange rate stabilization has been significantly more effective for goods prices over time, contributing to greater persistence of services inflation relative to goods.

### Sensitivity and Robustness Analysis
- Robustness exercises included:
  - Replacing the unemployment gap with the minimum wage; using the simple unemployment rate; alternate unemployment gap estimations.
  - Varying inflation inertia lags from 3 to 6.
  - Using headline goods and services inflation instead of core measures; alternative core services measure excluding just energy.
  - Using nominal effective depreciation rate instead of USD-lira depreciation rate.
  - Using gas prices instead of oil prices for supply shocks.
  - Alternative recursive ordering with the exchange rate reacting to the repo rate.
  - Including money growth and credit growth ordered after services and goods inflation.
  - Including inflation expectations as a seventh variable ordered after the exchange rate and repo rate, and varying the ordering to have expectations precede monetary policy.
- Core results—fast and asymmetric effects of exchange rate shocks on services and goods inflation—remain broadly unchanged.

### Policy Implications and Recommendations
- Exchange rate stabilization alone is insufficient to fully address services inflation due to higher inertia and muted pass-through to services.
- Macroeconomic policies aimed at reducing inflation inertia and eliminating backward-looking indexation should complement a stable exchange rate during disinflation.
- A rules-based switch from backward- to forward-looking indexation for prices and wages at the start of stabilization programs is likely preferable to discretionary adjustments or price/wage controls.
- Addressing credibility and widespread backward indexation is critical for successful disinflation.

### Key Summary Statistics (Appendix)
- Core services inflation: Mean 19.7; Std. dev. 23.3; Min 2.7; Max 86.4 (Source: TurkStat)
- Core goods inflation: Mean 18.5; Std. dev. 18.5; Min 1.1; Max 79.7 (Source: TurkStat)
- Headline services inflation: Mean 20.8; Std. dev. 25.1; Min 3.6; Max 97.0 (Source: TurkStat)
- Headline goods inflation: Mean 21.0; Std. dev. 21.6; Min 4.1; Max 94.9 (Source: TurkStat)
- Unemployment gap: Mean -0.2; Std. dev. 1.2; Min -2.5; Max 2.8 (Source: TurkStat)
- Minimum wage inflation: Mean 28.1; Std. dev. 31.5; Min 7.9; Max 179.7 (Source: TurkStat)
- Money growth: Mean 33.2; Std. dev. 22.6; Min 2.8; Max 98.9 (Source: TurkStat)
- Credit growth: Mean 29.4; Std. dev. 15.0; Min -5.4; Max 69.2 (Source: TurkStat)
- Inflation expectations (12m): Mean 13.8; Std. dev. 10.7; Min 6.1; Max 45.8 (Source: TurkStat)
- Oil price inflation (lira): Mean 35.8; Std. dev. 58.9; Min -55.4; Max 227.3 (Source: IFS)
- Gas price inflation (lira): Mean 79.8; Std. dev. 216.0; Min -77.1; Max 1187.2 (Source: IFS)
- Nominal depreciation rate: Mean 24.8; Std. dev. 25.1; Min -10.3; Max 114.6 (Source: TurkStat)
- Repo rate: Mean 13.4; Std. dev. 11.4; Min 4.5; Max 50.0 (Source: TurkStat)

*Source: IMF Working Paper — Services Inflation and the Exchange Rate (content unit).*

### References

### References

### Classical stabilization and policy lessons
- Calvo, Guillermo A., and Carlos A. Végh. 1994. “Inflation Stabilization and Nominal Anchors.” Contemporary Economic Policy 12 (2): 35–45.
- Cavallo, Domingo, and Sonia Cavallo. 1996. “Lessons from the Stabilization Process in Argentina, 1990–1996.” In Proceedings of the Symposium on Achieving Price Stability, 169–178. Jackson Hole, WY.
- Corbo, Vittorio, and Stanley Fischer. 1994. “Lessons from the Chilean Stabilization and Recovery.” Documentos de Trabajo 158, Instituto de Economia, Pontificia Universidad Católica de Chile.
- Corbo, Vittorio, and Andres Solimano. 1991. “Chile’s Experience with Stabilization, Revisited.” Policy Research Working Paper Series 579, The World Bank.
- Da Fonseca, Manuel A. R. 1998. “Brazil’s Real Plan.” Journal of Latin American Studies 30 (3): 619–639.
- Fischer, Stanley. 1987. “The Israeli Stabilization Program, 1985–86.” American Economic Review 77 (2): 275–278.
- Kiguel, Liviatan. 1988. “Inflationary Rigidities and Orthodox Stabilization Policies: Lessons from Latin America.” World Bank Economic Review 2 (3): 273–298.
- Pazos, Felipe. 1972. Chronic Inflation in Latin America. New York: Praeger.
- Werner, Alejandro, and Alejandro Santos. 2015. Peru: Staying the Course of Economic Success. Washington, DC: International Monetary Fund.

### Exchange rates, pass-through, and nominal anchors
- Edwards, Sebastian. 1992. “Exchange Rates as Nominal Anchors.” NBER Working Paper 4246, National Bureau of Economic Research, Inc.
- Edwards, Sebastián, and Fernando Lefort. 2002. “Stabilization, Persistence, and Inflationary Convergence: A Comparative Analysis.” In Indexation, Inflation and Monetary Policy, edited by Fernando Lefort and Klaus Schmidt-Hebbel, 65–104. Central Banking, Analysis, and Economic Policies Book Series 2. Santiago: Central Bank of Chile.
- García-Cicco, Javier, and Mariana García-Schmidt. 2020. “Revisiting the Exchange Rate Pass Through: A General Equilibrium Perspective.” Journal of International Economics 127: 103387.
- Gopinath, Gita. 2015. “The International Price System.” NBER Working Paper 21646, National Bureau of Economic Research.
- Kara, Hakan, and Fethi Öğünç. 2012. “Döviz kuru ve ithalat fiyatlarının yurt içi fiyatlara etkisi.” Iktisat Isletme ve Finans 27 (317): 9–28.
- McCarthy, Jonathan. 1999. “Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies.” Staff Report 111, Federal Reserve Bank of New York.
- Rossi, Marco, and Daniel Leigh. 2002. “Exchange Rate Pass-Through in Turkey.” IMF Working Paper 2002/204, International Monetary Fund.
- Taylor, John. 2000. “Low Inflation, Pass-Through, and the Pricing Power of Firms.” European Economic Review 44 (7): 1389–1408.
- Ozmen, Mustafa Utku, and Meltem Topaloglu. 2017. “Disaggregated Evidence for Exchange Rate and Import Price Pass-Through in the Light of Identification Issues, Aggregation Bias and Heterogeneity.” Working Paper 1708, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.

### Inflation dynamics, forecasting, and price rigidities
- Dao, Mai Chi, Pierre-Olivier Gourinchas, Daniel Leigh, and Prachi Mishra. 2024. “Understanding the International Rise and Fall of Inflation since 2020.” Journal of Monetary Economics 148 (S): 103658.
- Hobijn, Bart, Fernanda Nechio, and Adam Hale Shapiro. 2019. “Using Brexit to Identify the Nature of Price Rigidities.” FRBSF Economic Research Working Paper 2019-13, Federal Reserve Bank of San Francisco.
- Koca, Mehmet, and M. Tahsin Yilmaz. 2018. “A Closer Look at Core Inflation Dynamics with a Historical Perspective.” Working Paper, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Ogunc, Fethi. 2019. “A Bayesian VAR Approach to Short-Term Inflation Forecasting.” Working Paper 1925, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Ogunc, Fethi, Mustafa Utku Ozmen, and Cagri Sarikaya. 2018. “Inflation Dynamics in Turkey from a Bayesian Perspective.” Working Paper 1810, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
- Stock, James H., and Mark W. Watson. 2007. “Why Has U.S. Inflation Become Harder to Forecast?” Journal of Money, Credit and Banking 39 (s1): 3–33.
- Llaudes, Ricardo. 2007. “Monetary Policy Shocks in a Two-Sector Open Economy: An Empirical Study.” ECB Working Paper 799, European Central Bank.

### IMF and other institutional analyses
- IMF. 2024. “The Great Tightening: Insights from the Recent Inflation Episode.” In World Economic Outlook: Policy Pivot, Rising Threats, 47–78. Washington, DC: International Monetary Fund.

*International Monetary Fund — wpiea2026006-source-pdf - References*

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