TESTING THE PHILLIPS CURVE: A STUDY OVER TURKIYE

Abstract

The phenomenon of inflation is an inevitable situation faced by all large and small scale economies in the world. The decrease in the value of money caused by the continuous and rapid increase in the general level of prices has become an inevitable risk situation for the economies. The state of inflation in the economy has led to the growth of existing problems and the emergence of new problems.

 Within the scope of this study, the phenomenon of inflation, which poses great threats to all world economies, is discussed to define it. In addition to inflation, the phenomenon of unemployment, which is seen as the second biggest threat to the economies, is also discussed in the study, and the phillips curve, which tries to explain the existence and direction of the relationship between the two phenomena, has been studied. The Phillips curve has been examined in the study on the example of Turkey. As a result of the research and observations, it was concluded that the Phillips curve for Turkey was invalid when it was examined between 2006 and 2020.

  The data used in the study were obtained from Fred Data with a quarterly frequency. The descriptive statistics of the model are given in the appendix. The analysis made after inflation targeting was also effective in explaining the issues that occurred during the process with numerical dat Inflation, Inflation Targeting, Phillips Curve, Türkiye, Turkish Economya.