Inflation, Output Growth, and Stabilization in Turkey, 1980-2002
Selahattin Dibooglu and
Aykut Kibritçioğlu ()
Macroeconomics from EconWPA
Using a dynamic aggregate supply and aggregate demand model with imperfect capital mobility and structural VARs, we decompose inflation and output movements into those attributable to terms of trade, supply, balance-of-payments, fiscal, and monetary shocks. Empirical results show that terms of trade shocks have a significant negative effect on inflation in the short run. In the long run, monetary, and balance of payments shocks dominate while budget deficits play a limited role in the inflationary process. Demand shocks have limited effects on output movements; output is mostly driven by terms of trade and supply shocks. The results highlight the importance of a credible disinflation program and structural reform that restrain discretionary aggregate demand policies.
Keywords: Causes and effects of inflation; inflation theories; stabilization policy; theory of aggregate supply and aggregate demand; time series models; Turkish economy (search for similar items in EconPapers)
JEL-codes: E31 E23 F41 C32 (search for similar items in EconPapers)
Note: Type of Document - Acrobat Reader/PDF; prepared on PC; to print on any printer; pages: 33 ; figures: included
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Journal Article: Inflation, output growth, and stabilization in Turkey, 1980-2002 (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0306001
Access Statistics for this paper
More papers in Macroeconomics from EconWPA
Bibliographic data for series maintained by EconWPA ().