A disaggregated analysis of price dynamics

Turkey has been experiencing high inflation since mid-1970s. According to statistics published by the State Institute of Statistics (SIS), the annual inflation rate has been well above 20 percent since 1976 until the implementation of recent structural reforms. Interestingly, researchers have only recently begun to investigate the Turkish data in relation to linkages between inflation and the behavior of prices although high inflation rates observed throughout the world in the 1970s, and the 1980s have prompted many economists to propose macroeconomic models to explain the phenomena and to strive to find support for these models using aggregated or disaggregated data. Even so, given the unique experience of Turkey with prolonged inflation, the number of studies regarding the relationship between prices and inflation in Turkey are still too few and almost no research has been conducted to describe the behavior of prices.