Oil Prices and Inflation: Empirical Evidence from Turkey
Abstract views: 101
/ 
PDF downloads: 77
DOI:
https://doi.org/10.5281/zenodo.8309753Keywords:
Oil Prices, Inflation, Bounds Cointegration test, TurkeyAbstract
The nexus between oil prices and inflation has piqued the curiosity of policymakers, business leaders, and academics alike since oil price fluctuations have an impact on the inflation rates and accordingly on the entire economy. In this paper, we tried to investigate the relationship between oil prices and inflation in Turkey during the period from 1995 to 2022, utilizing the Bounds Cointegration test. The dependent variable is Inflation, consumer prices (annual %). The independent variables are Gross national expenditure (% of GDP), Broad money growth (annual %), and Oil prices - Crude oil prices. The results of this test confirm the long-run cointegration between inflation and oil prices during the studied interval. It's imperative for policymakers to contemplate amplifying economic tenacity by expanding the avenues of national revenue and targeting self-sufficiency in energy or a diverse energy landscape.
Downloads
References
Aka, K. (2020). The Effect of Oil Prices on Economic Growth, Inflation and Stock Market: An Application on Turkey's Economy. Finansal Araştırmalar ve Çalışmalar Dergisi, 359-382. https://doi.org/10.14784/marufacd.775871
Anyars, I. S., & Adabor, O. (2023). The impact of oil price changes on inflation and disaggregated inflation: Insights from Ghana. Research in Globalization, 6, 100125. https://doi.org/10.1016/j.resglo.2023.100125
Baba, C. & Lee, J. (2022). Second-round effects of oil price shocks. IMF Working Paper.
Diouf, M. A. (2007). Modeling Inflation for Mali. IMF Working Papers, 07(295), 1. https://doi.org/10.5089/9781451868586.001.
Ehrlich, I. (1996). Crime, Punishment and The Market for Offenses. Journal of Economic Perspective, 10(1), 43-67.
Gagliardone, L., & Gertler, M. (2023). Oil Prices, Monetary Policy and Inflation Surges. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.4381781.
Holm-Hadulla, F., & Hubrich, K. (2017). Macroeconomic implications of oil price fluctuations: a regime-switching framework for the euro area. Working Paper Series (2119), European Central Bank.
Ider, G., A. Kriwoluzky, F. Kurcz and B. Schumann (2023), The Energy-Price Channel of (European) Monetary Policy. DIW Discussion Paper.
Kelesbayev, D., Myrzabekkyzy, K., Bolganbayev, A., & Baimaganbetov, S. (2022). The Effects of the Oil Price Shock on Inflation: The Case of Kazakhstan. International Journal of Energy Economics and Policy, 12(3), 477-481. https://doi.org/10.32479/ijeep.13061.
Kilian, L., & Zhou, X. (2022). Oil Prices, Gasoline Prices, and Inflation Expectations. Journal of Applied Econometrics. https://doi.org/10.1002/jae.2911
Klepacz, M. (2021). Price Setting and Volatility: Evidence from Oil Price Volatility Shocks. International Finance Discussion Paper, (1315), 1-70. https://doi.org/10.17016/ifdp.2021.1316.
Miçooğulları, S.A. (2022). Yüksek Kurumsal Kalite ve Düşük Karbon Emisyonu ile Yüksek Büyüme Mümkün mü? İzmir İktisat Dergisi, 37(4), 849-869. Doi: 10.24988/ije.1014150
Nusair, S. A. (2019). Oil price and inflation dynamics in the Gulf Cooperation Council countries. Energy, 181, 997-1011. https://doi.org/10.1016/j.energy.2019.05.208.
Peker, O., & Mercan, M. (2011). The inflationary effect of price increases in oil products in Turkey. Ege Akademik Bakış, 11(4), 553-562.
Pesaran, M., & Shin, Y. (1999). An Autoregressive Distributed-Lag Modelling Approach to Cointegration Analysis. In S. Strøm (Ed.), Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium (Econometric Society Monographs, pp. 371-413). Cambridge: Cambridge University. doi:10.1017/CCOL521633230.011.
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. http://www.jstor.org/stable/ 2678547
Telek. C. and Miçooğulları, S.A. (2022). The Effect Of Macroeconomic Variables On Private Savings İn BRICS-T Economies. İktisadi İdari ve Siyasal Araştırmalar Dergisi, 7(19), 434-447.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Premium e-Journal of Social Science (PEJOSS)
This work is licensed under a Creative Commons Attribution 4.0 International License.
