The Effects of Oil Prices Changes on Output Growth and Inflation: Evidence from Turkey

  • Pelin ÖGE GÜNEY

Abstract

This paper investigates the effects of oil price changes on output and inflation for the case of Turkey using monthly time series data for the period 1990:1–2012:3. Recent studies suggest that oil price changes may have asymmetric effects on the macroeconomic variables. To account for asymmetric effects, we decompose oil price changes into positive and negative parts following Hamilton (1996). Our results show that while oil price increases have clear negative effects on output growth, the impact of oil price decline is insignificant. Similarly, oil price increases have positive and significant effects on inflation. However, oil price declines have not a significant effect on inflation. The Granger causality tests also support these results.

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Published
2013-11-30
How to Cite
GÜNEY, Pelin ÖGE. The Effects of Oil Prices Changes on Output Growth and Inflation: Evidence from Turkey. Journal of Economics and Behavioral Studies, [S.l.], v. 5, n. 11, p. pp. 730-739, nov. 2013. ISSN 2220-6140. Available at: <http://ifrnd.org/journal/index.php/jebs/article/view/446>. Date accessed: 20 mar. 2019. doi: https://doi.org/10.22610/jebs.v5i11.446.
Section
Research Paper