An Econometric Analysis of the Determinants of Inflation in Turkey

December 1, 1997

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Format: Chicago

Laura Papi, and G. C. Lim An Econometric Analysis of the Determinants of Inflation in Turkey, (USA: International Monetary Fund, 1997) accessed October 6, 2024

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.

Subject: Exchange rates, Foreign exchange, Government debt management, Inflation, Labor, Prices, Public financial management (PFM), Real exchange rates, Real wages

Keywords: Cost pressure, Equilibrium exchange rate, Exchange rate disequilibrium, Exchange rates, Foreign currency, Government debt management, Inflation, Market disequilibrium terms, Mining sector price, Monetary policy, Price, Price determination, Price equation, Price index, Price inflation, Price level, Price markup, Public finance, Real exchange rates, Real wages, WP

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1997/170
Stock No:

WPIEA1701997
ISBN:

9781451858389
ISSN:

1018-5941

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