Tradable and non-tradable inflation in Turkey: asymmetric responses to global factors

Hülya Saygılı () and Aysun Türkvatan ()
Additional contact information
Hülya Saygılı: Atılım University
Aysun Türkvatan: Central Bank of the Republic of Turkey

Empirical Economics, 2023, vol. 65, issue 2, No 14, 973-1006

Abstract: Abstract We contribute to the debate on the linkage between inflation regimes and globalization in several respects. First, we analyze consumer goods and services classified with respect to their tradability and content of intermediate imports. Second, we use 4-digit commodity-based price index data and the official weights of items in the consumer basket in computations. Third, we explore which states of the reference indicators are more related to low, normal or high regimes of inflation. Regimes are determined using Markov regime-switching models. Probability score analysis compares the best matching of different regimes of inflation and reference indicators. Fourth, since we use commodity-based data we perform the analysis for an emerging country, Turkey, which has not only high trade openness and high global integration rate but also implements inflation targeting regime. Findings suggest that relevance of the reference indicators for predicting inflation depends on: the share of tradable items in the consumer basket, imported intermediate content of items in the consumer basket, the regime of inflation and invoicing currency.

Keywords: Inflation regimes; Tradable/non-tradable inflation; Markov regime-switching models; Probability score analysis (search for similar items in EconPapers)
JEL-codes: C11 E31 F41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-023-02364-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:65:y:2023:i:2:d:10.1007_s00181-023-02364-3

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-023-02364-3

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().