The Case of Inflation In Turkey And Inflation Targeting

Inflation is one of the major economic problems in developing countries. Therefore, investigating the interaction between inflation uncertainty and economic magnitudes in countries, experiencing inflation problems, supports to shape the future economic policies. Inflation rates characterized as high and chronic before the year 2002 in Turkey tends to decrease with the implicit inflation targeting applications. By means of adequate and favourable conditions in internal dynamics, inflation targeting had been started until 2006 and inflation rates have reached to the single-digit level. This study addressing the effects of inflation uncertainty on inflation in the context of inflation targeting to find out if there is a structural change in the macroeconomic structure of Turkish economy, as a country that experienced the high-low inflation throughout such periods and is still classified under the emerging economies respectively. In the scope of the study, inflation, which is seen as a major indicator of price stability, is modelled and the effects of inflation uncertainty on inflation are determined within the mean stochastic volatility models


Inflation uncertainty, inflation, inflation targeting, emerging markets, stochastic volatility model

Author : Ümmühan MURAT - & Ahmet ATAKİŞİ
Number of pages: 478-484
Full text:
Journal of Academic Value Studies (JAVStudies)
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