Asymmetric Effects of Geopolitical Risks on Inflation in Turkey: A Wavelet-Based Analysis

Abstract

This study investigates the relationship between geopolitical risks and inflation in Turkey over the period 1985-2023, employing a time-frequency analysis approach. The study utilizes the Global Geopolitical Risk Index (GPR) as the indicator of geopolitical risk and the Consumer Price Index (CPI) as the indicator of inflation. Employing continuous (CWT), cross (XWT), and coherence (WTC) wavelet analyses, the study examines the intrinsic fluctuations of the variables, their co-movements, and correlations within the time-frequency domain. The findings from the wavelet analysis indicate a generally positive relationship between geopolitical risks and inflation in Turkey, which fluctuates across time and different frequencies. Notably, periods such as the Gulf War in the early 1990s, the 2001 economic crisis, and the post-2018 period exhibited a strong association between increased geopolitical risks and inflation. During these periods, significant co-movements (XWT) and high coherence (WTC) were identified between the variables, alongside short-to-medium-term cycles. In contrast, during the period of relative stability in the mid-2000s, the influence of geopolitical risks on inflation diminished. However, following 2018, the relationship has strengthened again, concurrent with an escalation in geopolitical risks faced by Turkey. The study's conclusions underscore the significance of considering geopolitical risks, exchange rate stability, energy and food security, the management of inflation expectations, and structural reforms in addressing inflation. The research contributes uniquely to the literature on the Turkish economy, by presenting a time-frequency domain analysis.

Keywords

• Geopolitical Risk
• Inflation
• Turkish Economy
• Wavelet Analysis
• Time-Frequency Analysis

Jeopolitik Risklerin Türkiye’de Enflasyon Üzerindeki Asimetrik Etkileri: Dalgacık Tabanlı Bir Analiz

Abstract

Bu çalışma, Türkiye'de jeopolitik riskler ile enflasyon arasındaki ilişkiyi 1985-2023 dönemi için zaman-frekans (time-frequency) analizi kullanarak incelemektedir. Çalışmada, jeopolitik risk göstergesi olarak Küresel Jeopolitik Risk Endeksi (GPR), enflasyon göstergesi olarak ise Tüketici Fiyat Endeksi (TÜFE) kullanılmıştır. Sürekli (CWT), çapraz (XWT) ve tutarlılık (WTC) wavelet analizleri ile değişkenlerin kendi içlerindeki dalgalanmaları, aralarındaki ortak hareketler ve korelasyonlar zaman-frekans düzleminde incelenmiştir. Wavelet analizi bulguları, Türkiye'de jeopolitik riskler ile enflasyon arasında, zaman içinde ve farklı frekanslarda değişen, ancak genel olarak pozitif bir ilişki olduğunu göstermektedir. Özellikle, 1990'ların başındaki Körfez Savaşı, 2001 ekonomik krizi ve 2018 sonrası dönemde jeopolitik risklerdeki artışların enflasyonla güçlü bir şekilde ilişkili olduğu bulunmuştur. Bu dönemlerde, kısa-orta vadeli döngülerde ve değişkenler arasında anlamlı ortak hareketler (XWT) ve yüksek korelasyon (WTC) tespit edilmiştir. 2000'li yılların ortalarındaki göreli istikrar döneminde ise, jeopolitik risklerin enflasyon üzerindeki etkisi zayıflamıştır. 2018 ve sonrasında, Türkiye'nin karşı karşıya kaldığı jeopolitik risklerin artmasıyla bu ilişkinin tekrar güçlendiği görülmektedir. Çalışmanın sonuçları, enflasyonla mücadelede jeopolitik risklerin, döviz kuru istikrarının, enerji ve gıda güvenliğinin, enflasyon beklentilerinin yönetiminin ve yapısal reformların önemine işaret etmektedir.

Keywords

• Jeopolitik Risk
• Enflasyon
• Türkiye Ekonomisi
• Wavelet Analizi
• Zaman-Frekans Analizi

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