EN
The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey
Abstract
This paper investigates the relationship between inflation and exchange rate in Turkey. Unlike many empirical studies which make use of the US and Turkey inflation data to test the relationship between inflation and exchange rate in Turkey, this paper employed inflation data of Turkey and the United Kingdom. An OLS regression and a simple GARCH model were used to understand the relationship between inflation and exchange rate. The results obtained from OLS regression indicate Purchasing Power Parity (PPP) does not exist in Turkey. However, the existence of ARCH and GARCH in the relationship indicates that the deviations from PPP are not random and follow a certain pattern. Therefore, we conclude that the deviation of PPP might be attributed to certain factors such as transaction cost, government restriction, product specialization or other related factors.
Keywords
Details
Primary Language
English
Subjects
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Journal Section
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Publication Date
September 1, 2016
Submission Date
September 1, 2016
Acceptance Date
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Published in Issue
Year 2016 Volume: 6 Number: 4
APA
Abdurehman, A. A., & Hacilar, S. (2016). The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey. International Journal of Economics and Financial Issues, 6(4), 1454-1459. https://izlik.org/JA84ZW45NH
AMA
1.Abdurehman AA, Hacilar S. The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey. IJEFI. 2016;6(4):1454-1459. https://izlik.org/JA84ZW45NH
Chicago
Abdurehman, Abderezak Ali, and Samet Hacilar. 2016. “The Relationship Between Exchange Rate and Inflation: An Empirical Study of Turkey”. International Journal of Economics and Financial Issues 6 (4): 1454-59. https://izlik.org/JA84ZW45NH.
EndNote
Abdurehman AA, Hacilar S (September 1, 2016) The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey. International Journal of Economics and Financial Issues 6 4 1454–1459.
IEEE
[1]A. A. Abdurehman and S. Hacilar, “The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey”, IJEFI, vol. 6, no. 4, pp. 1454–1459, Sept. 2016, [Online]. Available: https://izlik.org/JA84ZW45NH
ISNAD
Abdurehman, Abderezak Ali - Hacilar, Samet. “The Relationship Between Exchange Rate and Inflation: An Empirical Study of Turkey”. International Journal of Economics and Financial Issues 6/4 (September 1, 2016): 1454-1459. https://izlik.org/JA84ZW45NH.
JAMA
1.Abdurehman AA, Hacilar S. The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey. IJEFI. 2016;6:1454–1459.
MLA
Abdurehman, Abderezak Ali, and Samet Hacilar. “The Relationship Between Exchange Rate and Inflation: An Empirical Study of Turkey”. International Journal of Economics and Financial Issues, vol. 6, no. 4, Sept. 2016, pp. 1454-9, https://izlik.org/JA84ZW45NH.
Vancouver
1.Abderezak Ali Abdurehman, Samet Hacilar. The Relationship between Exchange Rate and Inflation: An Empirical Study of Turkey. IJEFI [Internet]. 2016 Sep. 1;6(4):1454-9. Available from: https://izlik.org/JA84ZW45NH