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The Wage-Price Spiral in Turkey and Its Effect on Inflation: ARDL Bounds Test Approach

Year 2022, Volume: 8 Issue: 2, 289 - 309, 25.10.2022
https://doi.org/10.20979/ueyd.1160762

Abstract

This article explores the validity of the wage-price spiral and its effect on inflation in Turkey in the period 2009Q1-2021Q3. For this purpose, three models have been estimated. The first is the basic wage-price spiral model; the second is the wage-price model decoupled from productivity in the industrial sector; the third is the extended model that takes into account the macro determinants underlying price inflation. According to the results of the models estimated using the ARDL Bounds Test Approach, the wage-price spiral is valid only when other determinants of inflation are ignored. According to the estimation results of the extended model, it is concluded that real gross domestic product on wages and exchange rate on prices are positive and statistically significant in both the long and short run.

References

  • Abdioğlu, Z. (2013). Ücret-fiyat spirali: Türk imalat sanayi örneği. Journal of Management and Economics Research, 11(19), 45-58.
  • Abdioğlu, Z. (2014). Ücret-fiyat spirali dinamiklerinin asimetrik etkisi: Türkiye örneği. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 36(1), 245-268.
  • Aydemir, B. (2021). II. Dünya Savaşı Sonrasında (1945-1950) Türkiye'nin İktisadî Durumu ve Sosyal Hayatta Yaşanan Gelişmeler. İçtimaiyat, 5(1), 73-89.
  • Blanchard, O. J. (1985). The Wage Price Spiral. NBER Working Paper, 1771, 1-29.
  • Boissay, F., De Fiore, F., Igan, D., Tejada, A. P., ve Rees, D. (2022). Are major advanced economies on the verge of a wage-price spiral? (No. 53). Bank for International Settlements.
  • Chen, P. ve Flaschel, P. (2005). Keynesian dynamics and the wage-price spiral: identifying downward rigidities. Computational Economics, 25(1), 115-142.
  • Chiarella, C. and Flaschel, P. (2000). The Dynamics of Keynesian Monetary Growth: Macro Foundations. Cambridge University Press, Cambridge, UK.
  • Clark, J. M. (1942). Wartime Price control and the Problem of Inflation. Law & Contemp. Probs., 9, 6.
  • Dağdemir, Ö., & Küçükkalay, A. M. (1999). Türkiye'de 1960-1980 Müdahale Dönemi Ekonomileri: İktisat Politikaları Ve Makro Ekonomik Göstergeler Açısından Bir Karşılaştırma. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, (3).
  • Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American statistical association, 74(366a), 427-431.
  • Dickey, D. A. ve Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: journal of the Econometric Society, 1057-1072.
  • Ernst, E., Flaschel, P., Proaño, C., & Semmler, W. (2006). Disequilibrium Macroeconomic Dynamics, Income Distribution and Wage-Price Phillips Curves: Evidence from the US and the euro area (No. 4/2006). IMK Working Paper.
  • Fares, H. ve Ibrahim, A. (2008). Wage-price causality in the Egyptian economy (1990-2005). The Egyptian Center for Economic Studies (ECES), Paper No. 136.
  • Flaschel, P., Kauermann, G., & Semmler, W. (2007). Testing wage and price Phillips curves for the United States. Metroeconomica, 58(4), 550-581.
  • Flaschel, P. ve Krolzig, H. M. (2002). Wage and price Phillips curves. CEM Working Paper 66, University of Bielefeld.
  • Friedman, M. (2005). How not to stop inflation. Federal Rezerv Summer, https://www.richmondfed.org/publications/research/econ_focus/2005/summer/~/media/06AE15D96C75465B97C4E981664E31A2.ashx (Erişim: 08.09.2022).
  • Gjelsvik, M., Nymoen, R. ve Sparrman, V. (2020). Cointegration and structure in Norwegian wage–price dynamics. Econometrics, 8(3), 29.
  • Hoxha, A. (2010). Causality between Prices and Wages: VECM Analysis for EU-12. Theoretical & Applied Economics, 17(5).
  • Hoxha, A. (2016). The switch to near-rational wage-price setting behavior: the case of United Kingdom. EuroEconomica, 35(1).
  • Kandil, M. (2003). The Wage-Price Spiral: Industrial Country Evidence and Implications, IMF Working Papers 2003/164, International Monetary Fund.
  • Kilian, L. ve Zhou, X. (2022). The impact of rising oil prices on U.S. inflation and inflation expectations in 2020–23, Energy Economics, 106228, 1-32.
  • Mehra, Yash P., (2000). Wage-Price Dynamics: Are They Consistent with Cost Push?. FRB Richmond Economic Quarterly, Vol. 86, No. 3,27-44.
  • Naziri, M. ve Farshadi, S. (2016). Price-Wage Spiral in Iran. Journal of Applied Economics Studies in Iran, 5(17), 151-169.
  • Paesani, P. ve Roselli, A. (2017). The wartime economy and the theory of price controls. Ikeda, Y., ve Rosselli, A. (Ed.), War in the History of Economic Thought: Economists and the Question of War (215-236) içinde. Routledge.
  • Pattanaik, S., Muduli, S. ve Ray, S. (2020). Inflation expectations of households: do they influence wage-price dynamics in India?. Macroeconomics and Finance in Emerging Market Economies, 13:3, 244-263.
  • Pesaran, M. H., Shin, Y. ve Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
  • Rissman, E. R. (1995). Sectoral Wage Growth and Inflation. Economic Perspective, 19(4): 15-28.
  • Sari, R., Ewing, B. T., & Soytas, U. (2008). The relationship between disaggregate energy consumption and industrial production in the United States: An ARDL approach. Energy Economics, 30(5), 2302-2313.
  • Saunders, M. ve Denniss, R. (2022). Wage price spiral or price wage spiral?. The Australia Institue Research that matters.
  • Tayşir, N. K. (2018). Türkiye’de Fordist Üretim Krizinin Ortam Koşulları Bağlamında İncelenmesi. Yönetim Bilimleri Dergisi, 16(32), 47-66.

Türkiye’de Ücret-Fiyat Sarmalı ve Enflasyon Üzerindeki Etkisi: ARDL Sınır Testi Yaklaşımı

Year 2022, Volume: 8 Issue: 2, 289 - 309, 25.10.2022
https://doi.org/10.20979/ueyd.1160762

Abstract

Bu makale, 2009Q1-2021Q3 döneminde Türkiye’de ücret-fiyat sarmalının geçerliliğini ve enflasyon üzerindeki etkisini araştırmaktadır. Bu amaçla üç model tahmin edilmiştir. Birincisi temel ücret-fiyat sarmalı modeli; ikincisi sanayi sektöründe verimlilikten ayrıştırılmış ücret-fiyat modeli; üçüncüsü fiyat enflasyonunun altında yatan makro belirleyicileri dikkate alan genişletilmiş modeldir. ARDL Sınır Testi Yaklaşımı kullanılarak tahmin edilen modellerin sonuçlarına göre, ücret-fiyat sarmalı ancak enflasyonun diğer belirleyicileri göz ardı edildiğinde geçerlidir. Genişletilmiş model tahmin sonuçlarına göre, hem uzun hem kısa dönemde, ücretler üzerinde reel gayrı safi yurtiçi hasılanın ve fiyatlar üzerinde döviz kurunun pozitif ve istatistiksel olarak anlamlı olduğu sonucuna ulaşılmıştır.

References

  • Abdioğlu, Z. (2013). Ücret-fiyat spirali: Türk imalat sanayi örneği. Journal of Management and Economics Research, 11(19), 45-58.
  • Abdioğlu, Z. (2014). Ücret-fiyat spirali dinamiklerinin asimetrik etkisi: Türkiye örneği. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 36(1), 245-268.
  • Aydemir, B. (2021). II. Dünya Savaşı Sonrasında (1945-1950) Türkiye'nin İktisadî Durumu ve Sosyal Hayatta Yaşanan Gelişmeler. İçtimaiyat, 5(1), 73-89.
  • Blanchard, O. J. (1985). The Wage Price Spiral. NBER Working Paper, 1771, 1-29.
  • Boissay, F., De Fiore, F., Igan, D., Tejada, A. P., ve Rees, D. (2022). Are major advanced economies on the verge of a wage-price spiral? (No. 53). Bank for International Settlements.
  • Chen, P. ve Flaschel, P. (2005). Keynesian dynamics and the wage-price spiral: identifying downward rigidities. Computational Economics, 25(1), 115-142.
  • Chiarella, C. and Flaschel, P. (2000). The Dynamics of Keynesian Monetary Growth: Macro Foundations. Cambridge University Press, Cambridge, UK.
  • Clark, J. M. (1942). Wartime Price control and the Problem of Inflation. Law & Contemp. Probs., 9, 6.
  • Dağdemir, Ö., & Küçükkalay, A. M. (1999). Türkiye'de 1960-1980 Müdahale Dönemi Ekonomileri: İktisat Politikaları Ve Makro Ekonomik Göstergeler Açısından Bir Karşılaştırma. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, (3).
  • Dickey, D. A., & Fuller, W. A. (1979). Distribution of the estimators for autoregressive time series with a unit root. Journal of the American statistical association, 74(366a), 427-431.
  • Dickey, D. A. ve Fuller, W. A. (1981). Likelihood ratio statistics for autoregressive time series with a unit root. Econometrica: journal of the Econometric Society, 1057-1072.
  • Ernst, E., Flaschel, P., Proaño, C., & Semmler, W. (2006). Disequilibrium Macroeconomic Dynamics, Income Distribution and Wage-Price Phillips Curves: Evidence from the US and the euro area (No. 4/2006). IMK Working Paper.
  • Fares, H. ve Ibrahim, A. (2008). Wage-price causality in the Egyptian economy (1990-2005). The Egyptian Center for Economic Studies (ECES), Paper No. 136.
  • Flaschel, P., Kauermann, G., & Semmler, W. (2007). Testing wage and price Phillips curves for the United States. Metroeconomica, 58(4), 550-581.
  • Flaschel, P. ve Krolzig, H. M. (2002). Wage and price Phillips curves. CEM Working Paper 66, University of Bielefeld.
  • Friedman, M. (2005). How not to stop inflation. Federal Rezerv Summer, https://www.richmondfed.org/publications/research/econ_focus/2005/summer/~/media/06AE15D96C75465B97C4E981664E31A2.ashx (Erişim: 08.09.2022).
  • Gjelsvik, M., Nymoen, R. ve Sparrman, V. (2020). Cointegration and structure in Norwegian wage–price dynamics. Econometrics, 8(3), 29.
  • Hoxha, A. (2010). Causality between Prices and Wages: VECM Analysis for EU-12. Theoretical & Applied Economics, 17(5).
  • Hoxha, A. (2016). The switch to near-rational wage-price setting behavior: the case of United Kingdom. EuroEconomica, 35(1).
  • Kandil, M. (2003). The Wage-Price Spiral: Industrial Country Evidence and Implications, IMF Working Papers 2003/164, International Monetary Fund.
  • Kilian, L. ve Zhou, X. (2022). The impact of rising oil prices on U.S. inflation and inflation expectations in 2020–23, Energy Economics, 106228, 1-32.
  • Mehra, Yash P., (2000). Wage-Price Dynamics: Are They Consistent with Cost Push?. FRB Richmond Economic Quarterly, Vol. 86, No. 3,27-44.
  • Naziri, M. ve Farshadi, S. (2016). Price-Wage Spiral in Iran. Journal of Applied Economics Studies in Iran, 5(17), 151-169.
  • Paesani, P. ve Roselli, A. (2017). The wartime economy and the theory of price controls. Ikeda, Y., ve Rosselli, A. (Ed.), War in the History of Economic Thought: Economists and the Question of War (215-236) içinde. Routledge.
  • Pattanaik, S., Muduli, S. ve Ray, S. (2020). Inflation expectations of households: do they influence wage-price dynamics in India?. Macroeconomics and Finance in Emerging Market Economies, 13:3, 244-263.
  • Pesaran, M. H., Shin, Y. ve Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of applied econometrics, 16(3), 289-326.
  • Rissman, E. R. (1995). Sectoral Wage Growth and Inflation. Economic Perspective, 19(4): 15-28.
  • Sari, R., Ewing, B. T., & Soytas, U. (2008). The relationship between disaggregate energy consumption and industrial production in the United States: An ARDL approach. Energy Economics, 30(5), 2302-2313.
  • Saunders, M. ve Denniss, R. (2022). Wage price spiral or price wage spiral?. The Australia Institue Research that matters.
  • Tayşir, N. K. (2018). Türkiye’de Fordist Üretim Krizinin Ortam Koşulları Bağlamında İncelenmesi. Yönetim Bilimleri Dergisi, 16(32), 47-66.
There are 30 citations in total.

Details

Primary Language Turkish
Subjects Economics
Journal Section Research Articles
Authors

Ezgi Baday Yıldız 0000-0002-5975-3803

Early Pub Date October 8, 2022
Publication Date October 25, 2022
Submission Date August 11, 2022
Published in Issue Year 2022 Volume: 8 Issue: 2

Cite

APA Baday Yıldız, E. (2022). Türkiye’de Ücret-Fiyat Sarmalı ve Enflasyon Üzerindeki Etkisi: ARDL Sınır Testi Yaklaşımı. Uluslararası Ekonomi Ve Yenilik Dergisi, 8(2), 289-309. https://doi.org/10.20979/ueyd.1160762

International Journal of Economics and Innovation

Karadeniz Technical University, Department of Economics, 61080, Trabzon/Türkiye
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