Turkish inflation dynamics driven by past output levels, not employment changes.
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 a significant 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 further understand inflation dynamics in Turkey.