publication . Preprint . 2002

Exchange Rate Pass-Through in Turkey

Marco Rossi; Daniel Leigh;
Open Access
  • Published: 01 Nov 2002
Abstract
In light of the strong correlation between exchange rate movements and domestic prices in Turkey, it is important to assess the impact of the exchange rate on domestic prices, in particular as Turkey moves to an inflation targeting regime. This paper uses a recursive vector autoregression model to investigate the impact of exchange rate movements on prices in Turkey. We find that (i) the impact of the exchange rate on prices is over after about a year, but is mostly felt in the first four months, (ii) the pass-through to wholesale prices is more pronounced compared to the pass-through to consumer prices, and (iii) the estimated pass-through is complete in a shor...
Subjects
free text keywords: Time-Series Models, Prices, Business Fluctuations, and Cycles: Forecasting and Simulation, Economywide Country Studies: Europe, [Exchange rate pass-through;Inflation;Inflation targeting;Turkey;distribution chain, VAR, exchange rate, exchange rate movements, exchange rate shock, nominal exchange rate, Multiple or Simultaneous Equation Models]
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