An Estimation of the Open Economy Hybrid New Keynesian Phillips Curve for Turkey

This study examines the inflation phenomenon employing monthly data set for period 2002:01-2020:07 in Turkey. We separate effects of dependency on imported intermediate goods and inputs production using two different exchange rates. In this way, direct arising from USD / TL rate indirect real effective are revealed separately. doing so, we also compare sub-periods which trends occur The results reveal that has a more substantial effect. While effect becomes evident when depreciates, it is seen determinant stable. find both lagged expected have similar magnitude situation emphasizes inertia importance expectations inflation. When increases, future increases even more. theoretical domestic output gap statistically insignificant. According to estimated model results, structural problems relatively high hampers price stability.