Affiliation:
1. Recep Tayyip Erdogan University , Faculty of Economics and Administrative Sciences, Department of Economics. , Rize / Turkey
Abstract
Abstract
Turkey has high inflation experience and in order to bring inflation rate down as well as maintaining macroeconomic stability many policy changes and reforms have been implemented. Despite some success, decreasing inflation rate is still an aim of monetary policy and price stability is still faraway. This article investigates time series properties of Turkish CPI inflation rate in both seasonally unadjusted and adjusted forms. Results of various unit root tests without structural breaks generally show that inflation rate is a nonstationary variable. This article also uses one and two breaks minimum LM unit root tests due to Lee and Strazicich (2004, 2003), respectively. In this case, test results show that inflation rate is a stationary variable with breaks. Although selected break points differ with respect to models and variables to some extent, it is observed that one break occurred around March 1994, and the second break occurred around April 2001.
Publisher
Editura Universitatii Alexandru Ioan Cuza din Iasi
Reference40 articles.
1. 1. Akyüz, Yılmaz and Korkut Boratav (2003), “The Making of the Turkish Financial Crisis”, World Development, Vol. 31, No. 9, pp.1549-1566.
2. 2. Basher, Syed A. and Joakim Westerlund (2008), “Is There Really a Unit Root in the Inflation Rate? More Evidence from Panel Data Models”, Applied Economics Letters, Vol. 15, No. 3, pp.161-164.10.1080/13504850600706305
3. 3. Bhargava, Alok (1986), “On the Theory of Testing for Unit Roots in Observed Time Series”, Review of Economic Studies, Vol. 53, No. 3, pp.369-384.
4. 4. Boratav, Korkut, A. Erinc Yeldan and Ahmet H. Köse (2000), “Globalization, Distribution and Social Policy: Turkey, 1980-1998”, New School University SCEPA Working Paper Series I Working Papers No. 20. New York: New School University.
5. 5. Byrne, Joseph P., Alexandros Kontonikas and Alberto Montgnoli (2010), “The Time-Series Properties of UK Inflation: Evidence from Aggregate and Disaggregate Data”, Scottish Journal of Political Economy, Vol. 57, No. 1, pp.33-47.