Asymmetric behavior of exchange rate pass through in Turkey
Author(s)
Advisor
Özlale, ÜmitDate
2009Publisher
Bilkent University
Language
English
Type
ThesisItem Usage Stats
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Abstract
This thesis investigates the presence of asymmetry in pass through from
exchange rates to manufacturing industry prices in Turkey. In the analysis, to detect a
possible nonlinear response of prices, threshold regression models are employed. The
results indicate that reactions of prices to exchange rate movements differ depending
on the aggregate demand conditions. In particular, when the economy is booming,
exchange rate changes are transmitted into prices in a larger extent. On the other
hand, during slowdowns, fluctuations of exchange rates are not reflected on prices
and past inflation has more important role in determining prices.