Inflation threshold effect on economic growth in turkey1

Esen Ö., Aydin C., Aydin R.

Journal of Advanced Research in Law and Economics, cilt.7, sa.8, ss.1983-1993, 2016 (Scopus) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 7 Sayı: 8
  • Basım Tarihi: 2016
  • Doi Numarası: 10.14505/jarle.v7.8(22).09
  • Dergi Adı: Journal of Advanced Research in Law and Economics
  • Derginin Tarandığı İndeksler: Scopus, Academic Search Premier, ABI/INFORM, EBSCO Legal Collection, EBSCO Legal Source
  • Sayfa Sayıları: ss.1983-1993
  • Anahtar Kelimeler: Economic growth, Inflation target, Inflation threshold, Threshold autoregressive model
  • Ankara Üniversitesi Adresli: Evet

Özet

© 2017, ASERS Publishing House. All rights reserved.In this study, the role of inflation threshold effect on economic growth has been investigated for Turkey in the 2002:Q1 – 2015:Q1 period. At the first stage, inflation threshold value has been detected. After that, inflation-economic growth relation has been examined using threshold autoregressive (TAR) model. Results indicate that there is a nonlinear relationship between inflation and growth rate; the threshold for the influence of inflation on economic growth is 8.89%; and an inflation rate above this threshold has a negative influence on economic growth while an inflation rate below this threshold has a positive influence on economic growth. In this regard, it is important to achieve sustainable growth, which plays a crucial role in increasing the efficiency of implemented monetary policies and assuring stability. Therefore, political and economic decision-makers should not ignore the concept of threshold within the scope of monetary policy while determining the target inflation rate in their efforts to deal with inflation.