Pass-through effects of exchange rate on inflation: The case of Turkey

Utku ALTUNÖZ

Makale detayları

Pass-through effects of exchange rate on inflation: The case of Turkey

Yazarlar:

Utku ALTUNÖZ

Yayıncı:

Cem IŞIK

Ana Başlıklar:

Ekonomi ve Maliye

Dergi:

Journal of Ekonomi 2020 Vol.2 Issue 2, pp.71-75

Belge Tipi:

Makale

Yayın Tarihi:

12/2020

Belge Dili:

İngilizce

Document ID (Org No.):

2000503960

Sıklık:

İki Yıllık

eISSN:

2687-2390

Özet:

 


In this study, the effect on inflation will occur volatility in the exchange rate in Turkey is examined. ARDL Boundary Test is preferred for the 2010-2018 period. Domestic producer price index (PPI) were used as a independent variable and weighted nominal exchange rate (EXC), world crude oil prices (OIL), domestic money supply (M3) and the capacity utilization rate (CUR) were used as dependent variables. According to the results, 1% increase in nominal exchange rate, 0.11% increase in domestic producer price index and 1% increase in world oil prices increase the producer price index by 0.07%. Similarly, a 1% increase in M3 money supply, a 0.28% increase in the producer price index and a 1% increase in the capacity utilization rate lead to a 0.31% increase in the producer price index. It is also understood that all variables in the model increase inflation. However, according to the findings, the long-term effects of the exchange rate effect on domestic prices remain low. In addition, the lowest transition effect on producer prices is attributable to crude oil prices. The other two variables M3 and the capacity utilization rate have a stronger effect on domestic prices than the exchange rate effect. The other two variables M3 and the capacity utilization rate have a stronger effect on domestic prices than the exchange rate effect.

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In this study, the effect on inflation will occur volatility in the exchange rate in Turkey is examined. ARDL Boundary Test is preferred for the 2010-2018 period. Domestic producer price index (PPI) were used as a independent variable and weighted nominal exchange rate (EXC), world crude oil prices (OIL), domestic money supply (M3) and the capacity utilization rate (CUR) were used as dependent variables. According to the results, 1% increase in nominal exchange rate, 0.11% increase in domestic producer price index and 1% increase in world oil prices increase the producer price index by 0.07%. Similarly, a 1% increase in M3 money supply, a 0.28% increase in the producer price index and a 1% increase in the capacity utilization rate lead to a 0.31% increase in the producer price index. It is also understood that all variables in the model increase inflation. However, according to the findings, the long-term effects of the exchange rate effect on domestic prices remain low. In addition, the lowest transition effect on producer prices is attributable to crude oil prices. The other two variables M3 and the capacity utilization rate have a stronger effect on domestic prices than the exchange rate effect. The other two variables M3 and the capacity utilization rate have a stronger effect on domestic prices than the exchange rate effect.

Makale detayları

Pass-through effects of exchange rate on inflation: The case of Turkey

Yazarlar: Utku ALTUNÖZ

Yayıncı: Cem IŞIK

Ana Başlıklar: Ekonomi ve Maliye

Dergi: Journal of Ekonomi 2020 Vol.2 Issue 2, pp.71-75

Belge Tipi: Makale

Yayın Tarihi: 12/2020

Belge Dili: İngilizce

Document ID (Org No.): 2000503960

Sıklık: İki Yıllık

eISSN: 2687-2390

Sayı

Yazarlar:

Utku ALTUNÖZ

Yayıncı:

Cem IŞIK

Ana Başlıklar:

Ekonomi ve Maliye

Dergi:

Journal of Ekonomi 2020 Vol.2 Issue 2, pp.71-75

Belge Tipi:

Makale

Yayın Tarihi:

12/2020

Belge Dili:

İngilizce

Document ID (Org No.):

2000503960

Sıklık:

İki Yıllık

eISSN:

2687-2390