Search IMF Staff Papers


Advanced Search
Journal Description

Editorial Committee

How to Subscribe

Forthcoming Articles

Staff Papers Archive

Copyright Information

Research at the IMF

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile





IMF Staff Papers Logo    Last updated: November 2004
Volume 51, Number 3
 
Would "Cold Turkey" Work in Turkey?
Oya Celasun, R. Gaston Gelos, and Alessandro Prati

Full Text of this Article (PDF 181K)

When inflation rates in a country are persistently high, observers often believe that the inflation process has become “inertial,” posing an obstacle to disinflation. Using an innovative approach, we assess the empirical validity of this argument for the case of Turkey. We find that the current degree of inflation persistence in Turkey is lower than in Brazil and Uruguay prior to their successful stabilization programs. More significantly, expectations of future inflation are more important than past inflation in shaping the inflation process, providing little evidence of “backwardlooking” behavior. Using survey data, we find that inflation expectations, in turn, largely depend on the evolution of fiscal variables. [JEL E31, E52]