Does Geopolitical Risk Affect Inflation? Empirical Analysis of the Impact of Russia-Ukraine and Israel-Palestine Events on Türkiye

Abstract

Geopolitical risk stemming from negative events such as war, terrorist acts and tensions, together with economic and political uncertainty, has a negative impact on economic activity. Therefore, this study aims to examine the impact of geopolitical concerns originating from Russia and Israel on the inflation level in Türkiye in the time period from January 2003 to January 2024. To achieve this objective, the series undergoes wavelet transformation and an analysis is conducted to determine if there are variations in the short-term, medium-term, and long-term effects. To account for structural discontinuities in the series, the Fourier quantile causality test was initially conducted. However, as the Fourier function did not yield significant results, the quantile causality test was then done. The data indicate that in the original series, unidirectional causation occurs only at the 0.1 quantile. However, in the converted series, causality is detected at the 0.8 quantile in the short run and at the 0.1 and 0.6 quantiles in the long run. This indicates that the long-term effect of geopolitical risk and other factors on inflation has become more significant in Türkiye. In line with the findings, recommendations were presented to policy makers and researchers.

Keywords

• Geopolitical risk
• ınflation
• Quantile causality
• russia
• Türkiye

Jeopolitik Risk Enflasyonu Etkiler mi? Rusya-Ukrayna ve İsrail-Filistin Olaylarının Türkiye Üzerindeki Etkisinin Ampirik Analizi

Abstract

Savaş, terör eylemleri ve gerginlikler gibi olumsuz olaylardan kaynaklanan jeopolitik risk ekonomik ve politik belirsizlikle birlikte, ekonomik aktivite üzerinde olumsuz bir etkiye sahip olmaktadır. Dolayısıyla bu çalışmada, Ocak 2003'ten Ocak 2024'e kadar olan zaman diliminde Rusya ve İsrail kaynaklı jeopolitik endişelerin Türkiye'deki enflasyon düzeyi üzerindeki etkisini incelemek amaçlanmıştır. Bu amaca ulaşmak için seriler dalgacık dönüşümüne tabi tutulmuş ve kısa vadeli, orta vadeli ve uzun vadeli etkilerde farklılıklar olup olmadığını belirlemek için bir analiz yapılmıştır. Serideki yapısal kesintileri hesaba katmak için öncelikle Fourier kantil nedensellik testi yapılmıştır. Ancak Fourier fonksiyonu anlamlı sonuçlar vermediğinden daha sonra kantil nedensellik testi yapılmıştır. Veriler, orijinal seride tek yönlü nedenselliğin yalnızca 0,1 kantilinde meydana geldiğini göstermektedir. Ancak dönüştürülen seride kısa vadede 0,8 kantilinde, uzun vadede ise 0,1 ve 0,6 kantillerinde nedensellik tespit edilmiştir. Bu durum, jeopolitik riskin ve diğer faktörlerin enflasyon üzerindeki uzun vadeli etkisinin Türkiye'de daha anlamlı hale geldiğini göstermektedir. Elde edilen bulgular doğrultusunda politika yapıcılara ve araştırmacılara öneriler sunulmuştur.

Keywords

• Jeopolitik risk
• Enflasyon
• Kantil nedensellik
• rusya
• Türkiye

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