An Econometric Analysis of the Determinants of Inflation in Turkey

33 Pages Posted: 15 Feb 2006

See all articles by Laura Papi

Laura Papi

International Monetary Fund (IMF)

Cheng Hoon Lim

International Monetary Fund (IMF)

Date Written: December 1997

Abstract

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.

JEL Classification: E31, E50, E60

Suggested Citation

Papi, Laura and Lim, Cheng Hoon, An Econometric Analysis of the Determinants of Inflation in Turkey (December 1997). IMF Working Paper, Vol. , pp. 1-33, 1997. Available at SSRN: https://ssrn.com/abstract=883293

Laura Papi

International Monetary Fund (IMF)

700 19th Street, N.W.
Washington, DC 20431
United States

Cheng Hoon Lim (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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