TY  - JOUR
TI  - An Estimation of the Open Economy Hybrid New Keynesian Phillips Curve for
Turkey
AB  - This study examines the inflation phenomenon employing monthly data set for the period
2002:01-2020:07 in Turkey. We separate the effects of dependency on imported
intermediate goods and inputs in production using two different exchange rates. In this
way, the direct effects arising from the USD / TL exchange rate and the indirect effects
arising from the real effective exchange rate are revealed separately. In doing so, we also
compare the sub-periods in which two separate trends occur in exchange rates. The results
reveal that the real effective exchange rate has a more substantial effect. While this effect
becomes more evident when the TL depreciates, it is seen that the USD / TL exchange rate
is more determinant when the TL is stable. We find that both lagged and expected effects
on inflation have a similar magnitude effect. This situation emphasizes the inertia and the
importance of expectations in inflation. When the exchange rate increases, the effect of
future expectations increases even more. The expected theoretical effect of the domestic
output gap on inflation is statistically insignificant. According to the estimated model
results, the effect of structural problems on inflation is relatively high and hampers price
stability.
AU  - Bari, Bilgin
AU  - Siklar, Ilyas
DO  - 10.25295/fsecon.981011
PY  - 2021
JO  - Fiscaoeconomia
VL  - 5
IS  - 3
SN  - 2564-7504
SP  - 1081
EP  - 1100
DB  - TRDizin
UR  - http://search/yayin/detay/537013
ER  -