Selim, Sibel Celal Bayar Üniversitesi - İktisadi ve İdari Bilimler Fakültesi - Ekonometri Bölümü, Turkey , Ayvaz Güven, Emine Türkan Celal Bayar Üniversitesi - Ahmetli Meslek Yüksekokulu, Turkey

ECONOMETRIC ANALYSIS of the RELATIONSHIP AMONG INFLATION, the EXCHANGE RATE and UNEMPLOYMENT in TURKEY

39768

Turkey is a country, which process high and chronic inflation and unemployment depending on crises and negative developments from the late 1970s to the present and is a country trying to fight it. One of the most important facts of economics is to follow a low level inflation and less unemployment policy in order to provide and sustain economic stability. As a result of instability in foreign exchange markets, national or international fluctuations have affected welfare levels of countries negatively. Moreover, increase in real effective exchange rates affect domestic prices by increasing the costs of import sectors and also may cause unemployment. This study aims to reveal the correlation among inflation, the exchange rate and unemployment in Turkey. The real effective exchange rates, CPI (consumer price index) and unemployment is used to examine short-and long-term relationships between these variables. The econometric analysis is performed for 1990-2012 years and then the results have been interpreted. Results of the analysis demonstrate that, real effective exchange rate affects CPI.

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Inflation , Exchange rate , Unemployment , Cointegration Analysis , Granger Causality , VAR Analysis

The International Journal Of Economic and Social Research

145