Exchange Rate and Import Price Pass-Through in Turkey

Bilgin Bari
Additional contact information
Bilgin Bari: Anadolu University

Business and Economics Research Journal, 2020, vol. 11, issue 3, 609-620

Abstract: This study researches the effect of exchange rate movements on Turkey’s domestic prices from 2003 through 2019. For the Turkish economy, the structural problems behind the inflation phenomenon are the dependency on imported intermediate goods for production and inflation expectations. Therefore, changes in exchange rates have a significant impact on domestic inflation. To analyze this process, the consumer price index (CPI), producer price index (PPI) and import price index (IPI) are examined by using VAR analysis. Estimations for two distinct periods- stable and upward courses in the exchange rate movement- yield different results. For the first stable period, import price and producer price shocks were more reflective than exchange rate shocks. Exchange rate shocks are found to be stronger than the import price shocks in the second period. The results show that structural problems of the Turkish economy related to production based on the import of intermediate goods, dollarization, and pricing behavior support exchange rate and imported price pass-through to consumer prices.

Keywords: Exchange Rate; Exchange Rate Pass-Through; Imported Prices Pass-Through; Consumer Prices; Vector Auto Regressive Model (search for similar items in EconPapers)
JEL-codes: E31 F31 F41 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.berjournal.com/exchange-rate-and-import-price-pass-through-in-turkey Full text (application/pdf)

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:ris:buecrj:0493

Access Statistics for this article

Business and Economics Research Journal is currently edited by Adem Anbar

More articles in Business and Economics Research Journal from Uludag University, Faculty of Economics and Administrative Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Adem Anbar ().