Searching For The Optimal Level: Inflation and Price Variability in Turkey

KARAHAN H., Yazgan M. E.

Singapore Economic Review, cilt.68, sa.1, ss.197-215, 2023 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 68 Sayı: 1
  • Basım Tarihi: 2023
  • Doi Numarası: 10.1142/s0217590819500231
  • Dergi Adı: Singapore Economic Review
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, IBZ Online, International Bibliography of Social Sciences, ABI/INFORM, Business Source Elite, Business Source Premier, EconLit, Public Affairs Index
  • Sayfa Sayıları: ss.197-215
  • Anahtar Kelimeler: Relative price variability, inflation, semi-parametric regression
  • İstanbul Medipol Üniversitesi Adresli: Evet

Özet

This paper explores the relationship between inflation and relative price variability (RPV) in Turkey for the period 2004-2017 to shed further light on the issue with relatively recent data. For this purpose, we use monthly price data for 12 main item groups and 414 specific items thereof. Analyses show that RPV for the period of interest exhibits large fluctuations, being particularly salient in the categories of communications and food. Regarding the underlying functional form, semi-parametric estimation results indicate a U-shaped relationship between inflation and RPV, where the latter reaches its minimum at an inflation level close to 8%.