How Oil Prices Drive Inflation in Turkish Economy: Two Different Channels

Bilgin Barä° and Zafer Adali

Fiscaoeconomia, 2020, issue 3

Abstract: This study analyzes the impact of changes in oil prices on consumer inflation in Turkey. We compare the effects of the changes in crude oil and gasoline prices on the consumer prices. These effects differ symmetrically and asymmetrically for the period 2009:01-2020:04. For this purpose, inflationary effects are estimated using linear and non-linear ARDL models. According to the findings, changes in both oil and fuel prices have asymmetric effects on inflation in the short run. Both models explain the changes in consumer inflation with the increases in oil prices in the long run. The result indicates that the decreases in oil prices are not taken into account in pricing decisions.

Keywords: Oil Price; Gasoline Price; Inflation; Nonlinear ARDL Model (search for similar items in EconPapers)
JEL-codes: C22 E31 E37 Q41 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:fis:journl:200310

DOI: 10.25295/fsecon.786956

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