Inflation Dynamics in Türkiye within the New Keynesian Theory Framework: Structural VAR Analysis of the Trade Balance, Exchange Rate, and Expectations

Abstract

In recent years, chronic inflation has emerged as the biggest obstacle to sustainable growth, weakening macroeconomic stability in the Turkish economy. The aim of this study is to empirically explain inflation dynamics in Turkey, covering not only macroeconomic factors but also inflation expectations. Within the scope of the study, a structural VAR analysis estimation was conducted using Turkey's macro time series for the period between the first quarter of 2013 and the second quarter of 2025, incorporating the trade balance, exchange rate, oil price, and unemployment channels into the extended Phillips curve model within the New Keynesian framework. The short- and medium-term dynamics of unemployment, current account balance, expectations, output gap, exchange rate, and oil price on inflation were detailed using impulse response functions under structural shocks defined by Cholesky decomposition. The findings show that all variables have a significant effect on inflation but generally dampen within four to six quarters. Empirical analyses demonstrate that the transmission mechanisms of inflation shocks in the Turkish economy are shaped by both domestic demand (unemployment-output gap) and external (exchange rate-current account balance-commodity prices) components. It is concluded that coordinated measures targeting both demand and external shocks, along with expectation management, are important for policymakers.

Keywords

• Inflation
• Structural VAR
• New Keynesian Phillips Curve

Yeni Keynesyen Teori Çerçevesinde Türkiye'de Enflasyon Dinamikleri: Dış Ticaret Dengesi, Kur ve Beklentiler Üzerine Yapısal VAR Analizi

Abstract

Son yıllarda kronikleşen enflasyon, Türkiye ekonomisinde makroekonomik istikrarı zayıflatan ve sürdürülebilir büyüme önündeki en büyük engel olarak öne çıkmıştır. Bu çalışmanın amacı, Türkiye’de makroekonomik faktörlerin yanı sıra enflasyon beklentilerini de kapsayacak şekilde enflasyon dinamiklerini ampirik olarak açıklamaktır. Çalışma kapsamında 2013 birinci çeyrek ile 2025 ikinci çeyrek dönemi için Türkiye’ye ait makro zaman serileri kullanılarak, Yeni Keynesyen Kuram çerçevesindeki genişletilmiş Phillips eğrisi modeline dış ticaret dengesi, döviz kuru, petrol fiyatı ve işsizlik kanallarını da ekleyen yapısal VAR analizi tahmini gerçekleştirilmiştir. Cholesky ayrıştırmasıyla tanımlanan yapısal şoklar altındaki etki-tepki fonksiyonlarıyla işsizlik, cari denge, beklentiler, çıktı açığı, döviz kuru ve petrol fiyatının enflasyon üzerindeki kısa ve orta vadeli dinamikleri ayrıntılı biçimde ortaya konmuştur. Bulgular, tüm değişkenlerin enflasyon üzerinde anlamlı bir etkisi olduğunu fakat genellikle dört-altı çeyrek içinde sönümlendiğini göstermektedir. Türkiye ekonomisinde enflasyon şoklarının yayılma mekanizmalarının hem iç talep (işsizlik-çıktı açığı) hem de dışsal (kur-cari denge-emtia fiyat) bileşenlerce şekillenmekte olduğunu ampirik analizler kanıtlamaktadır. Politika yapıcılar için hem talep hem de dışsal şoklara yönelik eşgüdümlü önlemler ve beklenti yönetiminin önemli olduğu çıkarımı yapılmıştır.

Keywords

• Enflasyon
• Yapısal VAR
• Yeni Keynesyen Phillips Eğrisi

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