THE RATIONALITY OF INFLATION EXPECTATIONS IN TURKEY AND ITS EFFECT ON THE FUNCTIONING OF EXPECTATIONS CHANNEL
Anahtar Kelimeler:
Anticipations d’inflation, Politique monétaire macro prudentielle, Mécanisme de transmission., : Inflation expectations, Macroprudential monetary policy, Transmission mechanism.
THE RATIONALITY OF INFLATION EXPECTATIONS IN TURKEY AND ITS EFFECT ON THE FUNCTIONING OF EXPECTATIONS CHANNEL
Since the global financial crisis of 2008, the Central Bank of the Republic of Turkey has been using macroprudential monetary policies whose objectives are price stability and financial stability. The Central Bank can affect the real sector and achieve its objectives through the transmission mechanism. The expectations according to which agents determine their economic behavior play an important role in this mechanism. If these expectations are not rational, the expectations channel of the transmission mechanism cannot function efficiently. In this work, the aim is to find out if the inflation expectations of Turkish agents are rational within the framework of macroprudential policies; which in turn allows a good functioning of the channel of expectations. With this perspective, several empirical analysis have been conducted for the period January 2010-October 2022, using inflation expectations errors calculated from surveys conducted by the Central Bank. The run test, Wald test, Portmanteau test and unit root tests showed that consumer price inflation expectations for the current month, next 12 and 24 months and expectations for producer price inflation for the next 12 months are not rational because they are biased, auto correlated and systematic hence the effective functioning of the expectations channel is queried.
___
- Abdioğlu, Z., & Yılmaz, S. (2013). Rasyonel Beklentiler Hipotezinin Testi: Enflasyon, Faiz ve Kur. Çukurova Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 17(1), 21-36.
- Alcidi, C., Gros, D., & Shamsfakhr, F. (2022). Inflation expectations: models and measures. Politica economica, 1-18. https://doi.org/10.1429/103706
- Andolfatto, D., Hendry, S., & Moran, K. (2008). Are inflation expectations rational?. Journal of Monetary Economics, 55(2), 406-422. https://doi.org/10.1016/j.jmoneco.2007.07.004
- Barlas Özer, Y., & Mutluer, D. (2012). Inflation expectations in Turkey: Statistical evidence from the business tendency survey. Central Bank Review, 5(2), 73-97.
- Başkaya, S., Kara, H., & Mutluer, D. (2008). Expectations, communication and monetary policy in Turkey. TCMB Çalışma Tebliği, 8(1).
- Bernanke, B. S. (2007, July). Inflation expectations and inflation forecasting. In Speech at the Monetary Economics Workshop of the National Bureau of Economic Research Summer Institute, Cambridge, Massachusetts (Vol. 10).
- Blanchard, O. & Cohen, D. (2004). Macroéconomie, Bruxelles: Pearson Education, ISBN 2-7440-7019-X. 593p. Chamouton, T., & Piatecki, C. (1984). Anticipations rationnelles et théorie économique. Revue d’économie politique, 754-772. http://www.jstor.org/stable/24698862.
- Christiano, L., & Gust, C. (2000). The expectations trap hypothesis. National Bureau of Economic Research Working Papers, 7809. https://doi.org/10.3386/w7809
- Englander, A. S., & Stone, G. (1989). Inflation expectations surveys as predictors of inflation and behavior in financial and labor markets. Quarterly Review, 14(Aut), 20-32.
- Figlewski, S., & Wachtel, P. (1981). The formation of inflationary expectations. The Review of Economics and Statistics, 1-10. https://doi.org/10.2307/1924211
- Forsells, M., & Kenny, G. (2002). The rationality of consumers’ inflation expectations: survey-based evidence for the euro area. European Central Bank Working Paper Series, 163. Available at SSRN 358021. https://doi.org/10.2139/ssrn.358021
- Guesnerie, R. (2011). Rationalité économique et anticipations rationnelles. Idées économiques et sociales, 165(3), 7-14. https://doi.org/10.3917/idee.165.0007
- Kara, H., & Tuğer, H. K. (2005). Some evidence on the (ir) rationality of inflation expectations in Turkey. The Central Bank of the Republic of Turkey Working Paper, 05(12).
- Kara, H., & Küçük-Tuğer, H. (2010). Inflation expectations in Turkey: learning to be rational. Applied Economics, 42(21), 2725-2742. https://doi.org/10.1080/00036840801964559
- Karadaş, E., & Öğünç, F. (2003). An Analysis of Inflation Expectations of the Turkish Private Manufacturing Industry. Central Bank Review, 3(2), 57-83.
- Lucas Jr, R. E. (1972). Expectations and the Neutrality of Money. Journal of economic theory, 4(2), 103-124. https://doi.org/10.1016/0022-0531(72)90142-1
- Muth, J. F. (1961). Rational expectations and the theory of price movements. Econometrica: Journal of the Econometric Society, 315-335. https://doi.org/10.2307/1909635
- Oral, E. (2013). Consumer inflation expectations in Turkey (No. 10). Bank for International Settlements. Oral, E., Saygili, H., Saygili, M., & Tuncel, S.Ö. (2011). Inflation expectations in Turkey: evidence from panel data. OECD Journal: Journal of Business Cycle Measurement and Analysis, 2011(1), 5-28. https://doi.org/10.1787/jbcma-2011-5kgg5k53np7c
- Pesaran, M. H., & Weale, M. (2006). Survey expectations. Handbook of economic forecasting, 1, 715-776. https://doi.org/10.1016/S1574-0706(05)01014-1
- Rudd, J. B. (2022). Why do we think that inflation expectations matter for inflation? (And should we?). Review of Keynesian Economics, 10(1), 25-45. https://doi.org/10.17016/FEDS.2021.062
- Sargent, T. J. (1973). “Rational Expectations” : A Correction. Brookings Papers on Economic Activity, 4(3), 799-800. https://www.jstor.org/stable/23356949
- Soybilgen, B., & Yazgan, E. (2017). An evaluation of inflation expectations in Turkey. Central Bank Review, 17(1), 31-38. https://doi.org/10.1016/j.cbrev.2017.01.001
- Türkiye Cumhuriyet Merkez Bankası, 2013, Parasal Aktarım Mekanizması, Ankara, 17p. Available at ISBN 978-605-5758-89-9.
- Us, V., & Ozcan, K. M. (2005). Optimal univariate expectations under high and persistent inflation: new evidence from Turkey. Physica A: Statistical Mechanics and its Applications, 346(3-4), 499-517. https://doi.org/10.1016/j.physa.2004.08.001
- Yıldırım, N. (2002). Yönelim anketlerini büyüme tahminlerinde ne ölçüde kullanabiliriz?. METU Studies in Development, 29(1), 175.
- Başlangıç: 2023
- Yayıncı: Galatasaray Üniversitesi
Sayıdaki Diğer Makaleler
Winning The Zero on Eastern Mediterranean Chessboard: Players, Games and Moves
Ali Faik DEMİR, Doğuş SÖNMEZ, Emre ÖNKİBAR
Yapısal Denklemlere Yönelik Üç Ana Yaklaşımın Karşılaştırılması
Aslı Gül ÖNCEL, Mariem KHADHRAOUİ
Sustainability Promises of Turkish origin Apparel Brands in the Context of Greenwashing