Turkish inflation driven by output levels, not employment rates: study
The study analyzed Turkish economy from 2000-2012 to understand inflation dynamics using the New Keynesian Phillips Curve. They found that past levels of output affect current inflation, but employment and unemployment levels do not have much impact. The researchers used GMM methodology to estimate price equations and found a hysteresis effect in price dynamics. Future research will explore new variables like marginal cost index to better explain inflation in Turkey.