High inflation in Turkey leads to increased economic uncertainty over time.
The article examines the connection between inflation and uncertainty in Turkey from 1923 to 2012. High inflation is found to increase inflation uncertainty in the long run, supporting Friedman's hypothesis. However, in the short term, an increase in inflation uncertainty leads to a decrease in inflation, supporting the Holland hypothesis. The relationship between inflation and inflation uncertainty varies in different time periods, depending on major policy changes in the Turkish economy.