Türki̇ye’de Enflasyon ve İşsi̇zli̇k Arasındaki̇ İli̇şki̇ni̇n Vektör Hata Düzeltme Modeli̇ ile Anali̇zi̇

Abstract

The aim of this study is to analyze the relationship between inflation and unemployment in Turkey and test the validity of the Phillips curve. In the study, monthly data for the period 2005:01-2018:04 were used and firstly the series were tested if the variables were stagnant. Then it was investigated whether there was a long-term relationship with Johansen Cointegration Test. In the long run, the Granger Causality Analysis based on the Error Correction Model was applied to the series which were found to be cointegrated and also the variance decomposition method was used. According to the results, a bidirectional causality was identified between unemployment and inflation rates in Turkey’s economy. Findings obtained from variance decomposition were consistent with the results.