How do Real and Monetary Integrations Affect Inflation Dynamics in Turkey?

Hulya Saygili

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This paper examines the significance of real and monetary integrations among countries on the inflationary dynamics of an emerging country, Turkey. The analysis accounts for 2-digit items of CPI inflation which can be broadly categorized as tradable/non-tradable and goods/services. The results show that fall in inflation gap between the partners is mainly related with the real integration while co-movement of inflation is prominently driven by the monetary policy co-movement. The product type analysis documents that inflation gap in tradable items shrinks and become more correlated with the convergence and co-movement of real variables.

Keywords: Globalization; Inflation gap; Co-movement; CPI sub-items; Turkey (search for similar items in EconPapers)
JEL-codes: E31 F14 F4 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ara, nep-cba, nep-isf, nep-mac and nep-mon
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https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2021/21-21

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2121

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