How Oil Prices Drive Inflation in Turkish Economy: Two Different Channels

Yıl 2020, Cilt: 4 Sayı: 3, 705 - 721, 20.09.2020

Bilgin Bari Zafer Adalı

https://doi.org/10.25295/fsecon.786956

Cited By: 5

Öz

This study analyzes the impact of changes in oil prices on consumer inflation in Turkey. We compare the effects of the changes in crude oil and gasoline prices on the consumer prices. These effects differ symmetrically and asymmetrically for the period 2009:01-2020:04. For this purpose, inflationary effects are estimated using linear and non-linear ARDL models. According to the findings, changes in both oil and fuel prices have asymmetric effects on inflation in the short run. Both models explain the changes in consumer inflation with the increases in oil prices in the long run. The result indicates that the decreases in oil prices are not taken into account in pricing decisions.

Anahtar Kelimeler

Oil Price,, Nonlinear ARDL Model, Gasoline Price, Inflation,

Kaynakça

• Atuk, O., Aysoy, C., Özmen, M. U. and Ç. Sarıkaya (2014), “Sensitivity of Inflation to Business Cycles in Turkey: Determining CPI Sub-items Sensitive to Output Gap”. CBRT Working Paper, 14/37.
• Balkan, B., Kal, S. H., S. Tümen (2015), “Investigating the Effect of Fuel Prices on Fresh Fruit and Vegetable Prices Through the Transportation Cost Channel”. CBRT Research Notes in Economics, 2015/08.
• Balke, N. S., Brown, S. P., & Yücel, M. K. (2002), “Oil price shocks and the US economy: Where does the asymmetry originate?”. The Energy Journal, 27-52.
• Baumeister, C., & Kilian, L. (2014), “Do Oil Price Increases Cause Higher Food Prices?”. Economic Policy, 29(80), 691-747.
• Çatik, A. N., & Karaçuka, M. (2012), “Oil Pass-Through to Domestic Prices in Turkey: Does The Change In Inflation Regime Matter?”. Economic research-Ekonomska istraživanja, 25(2), 277-296.
• Çatık, A. N., & Önder, A. Ö. (2013), “An Asymmetric Analysis of the Relationship Between Oil Prices and Output: The Case of Turkey”. Economic Modelling, 33, 884-892.
• Chen, S. S. (2009), “Oil Price Pass-Through into Inflation”. Energy Economics, 31(1), 126-133.
• Clark, T. E., & Terry, S. J. (2010), “Time Variation in The Inflation Passthrough of Energy Prices”. Journal of Money, credit and Banking, 42(7), 1419-1433.
• Davari, H., & Kamalian, A. (2018), “Oil Price and Inflation in Iran: Non-Linear ARDL Approach”. International Journal of Energy Economics and Policy, 8(3), 295-300.
• De Gregorio, J., Landerretche, O., Neilson, C., Broda, C., & Rigobon, R. (2007), “Another Pass-Through Bites the Dust? Oil Prices and Inflation [With Comments]”. Economia, 7(2), 155-208.
• Dedeoğlu, D., & Kaya, H. (2014), “Pass-Through of Oil Prices to Domestic Prices: Evidence from an Oil-Hungry but Oil-Poor Emerging Market”. Economic Modelling, 43, 67-74.
• ECB. (2010), “ Oil Prices – Their Determinants and Impact on Euro Area Inflation and the Macroeconomy”. Monthly Bulletin, (August), 75–92.
• Ertug, D., Özlu, P., and Yunculer, C. (2018). İthalat girdi kullanımı kur ve ithalat fiyatı geçişkenliğini nasıl etkiliyor?. Merkezin Güncesi. https://tcmbblog.org/wps/wcm/connect/blog/tr/main%20menu/analizler/ithal-girdi-kullanimi-kur-ithalat-fiyati-geciskenligini-nasil-etkiliyor
• Gokmenoglu, K., Azin, V., & Taspinar, N. (2015), “The Relationship Between Industrial Production, GDP, Inflation and Oil Price: The Case of Turkey”. Procedia Economics and Finance, 25, 497-503.
• Hamilton, J. D. (1996), “This Is What Happened to The Oil Price-Macroeconomy Relationship”, Journal of Monetary Economics. 38(2), 215-220.
• Kal, S. H., Arslaner, F. and N. Arslaner (2015), “Sources of Asymmetry and Non-linearity in Pass-Through of Exchange Rate and Import Price to Consumer Price Inflation for the Turkish Economy during Inflation Targeting Regime”. CBRT Research Notes in Economics, 15/30.
• Kara, A.H., Sarikaya, C., and Ogunc, F. (2017). Kurdan enflasyona geçiş: sihirli bir rakam var mı?. Merkezin Güncesi. https://tcmbblog.org/wps/wcm/connect/blog/tr/main%20menu/analizler/kurdan_enflasyona_gecis.
• Kilian, L., & Lewis, L. T. (2011), “Does The Fed Respond to Oil Price Shocks?”. The Economic Journal, 121(555), 1047-1072.
• Lacheheb, M., & Sirag, A. (2019), “Oil Price and Inflation in Algeria: A Nonlinear ARDL Approach”. The Quarterly Review of Economics and Finance.
• Mork, K. A. (1989), “Oil and The Macroeconomy When Prices Go Up and Down: An Extension of Hamilton's Results”. Journal of political Economy, 97(3), 740-744.
• Mory, J. F. (1993), “Oil Prices and Economic Activity: Is The Relationship Symmetric?”. The Energy Journal, 151-161.
• Ozata, E. (2019), “Asymmetric and Nonlinear Pass-Through of Global Crude Oil Price to Inflation in Turkey”. Optimum Journal of Economics and Management Sciences, 2019, 6(1), 17-32.
• Özmen, M. U. and Ç. Sarıkaya (2014), “Sensitivity of Inflation to Output Gap and Loans”. CBRT Research Notes in Economics, 2014/17.
• Öztürkler, H., Demir, F., & Yılmaz, S. (2015), “Crude Oil Price Pass-Through to Domestic Prices in Turkey: Asymmetric Nonlinear ARDL Approach”. EY International Congress on Economics II, (256), 1–14.
• Pesaran, M. H., Shin, Y., & Smith, R. J. (2001), “Bounds Testing Approaches to The Analysis of Level Relationships”. Journal of applied econometrics, 16(3), 289-326.
• Pesaran, M. H., Shin, Y., & Smith, R. P. (1997), “Pooled Mean Group Estimation of Dynamic Heterogeneous Panels”. Journal of the american statistical association, 94(446), 621-634.
• Shin, Y., Yu, B., & Greenwood-Nimmo, M. (2013), Modelling Asymmetric Cointegration And Dynamic Multipliers In A Nonlinear ARDL Framework, In Festschrift In Honor Of Peter Schmidt (Pp. 281-314). Springer, New York, NY.
• Tang, W., Wu, L., & Zhang, Z. (2010), “Oil Price Shocks and Their Short-And Long-Term Effects On the Chinese Economy”. Energy Economics, 32, S3-S14.
• Taspinar, K. G. V. A. N. (2015), “The Relationship Between Industrial Production, GDP, Inflation and Oil Price: The Case of Turkey”. Procedia Economics and Finance, 25, 497-503.
• Tiwari, A. K., Cunado, J., Hatemi-J, A., & Gupta, R. (2018), Oil Price-Inflation Pass-Through in the United States over 1871 to 2018: A Wavelet Coherency Analysis (No. 201865).