Analysing The Effect of Exchange Rates on Sectoral Inflation and Terms of Trade in Turkiye
TEA2024 The 31st Conference on Economics October 31 – November 02, 2024 , Muğla, Türkiye, 31 Ekim - 02 Kasım 2024, ss.209, (Özet Bildiri)
- Yayın Türü: Bildiri / Özet Bildiri
- Basıldığı Şehir: Muğla
- Basıldığı Ülke: Türkiye
- Sayfa Sayıları: ss.209
- Dokuz Eylül Üniversitesi Adresli: Evet
Özet
Inflation in Turkiye has been at a high level for about 50 years. For this reason, Turkiye is one of the countries with the longest period of high inflation in the world. This situation reveals that inflation is fuelled not only by economic but also by social, political and cultural factors. However, it is also observed that rapid increases in inflation are mostly in line with exchange rate increases. Therefore, it can be said that inflation is influenced by global as well as domestic factors. On the other hand, regardless of the sources of inflation, it is observed that inflation, i.e. price increases, differ across sectors. This situation affects the terms of trade and may change the direction of resource transfer between sectors. Depending on these developments, resource allocation in the country is also affected. The aim of this study is to reveal the effects of nominal and real exchange rates on prices and then on the terms of trade in Turkiye and to develop possible policy recommendations based on the results. In this framework, the first section of the study analyses the development of nominal and real exchange rates in Turkiye. In the second section, the impact/transition channels of exchange rate developments on sectoral prices will be systematised. In the third section, developments in sectoral price movements will be revealed with the help of deflators and terms of trade will be calculated. Finally, the interaction between terms of trade and exchange rates will be analysed by statistical methods.