Asymmetric and Nonlinear Pass-Through of Global Crude Oil Price to Inflation in Turkey

Since the fluctuations in oil prices have important economic consequences, it is one of the most frequently investigated topics by scholars and policymakers. Although increase in oil prices is good for oil exporting countries, it is bad for countries like Turkey who meet energy needs by importing crude oil. The effect of global crude oil prices on domestic inflation is not very clear. In this study, based on the augmented Phillips curve framework, linear and nonlinear ARDL methods are used to examine the asymmetric effects of oil price fluctuations on consumer and producer prices in Turkey. According to the empirical results, the effects of fluctuations in oil prices on consumer and producer prices are asymmetrical in the long run and symmetrical in the short run. A %100 increase in oil price increases CPI by %13,05 and PPI by %14,7. A %100 decrease in oil price decrease CPI by %11,27 and PPI by %7,24