Özet:

Purpose - In this paper, aftermath of the FX shock experienced in August 2018, as a result of increasing production costs the evolution of inflation inertia is examined Methodology - We examined the endogenous nature of inflation and the increase in producer prices after exchange rate changes and the effect of monetary policies on inflation by using impulse-response analysis for the short term and DCC-GARCH and wavelet analysis for the medium-long term Findings- The dynamic conditional correlation coefficients between CPI-MS were not significant even at the 1% significance level (excluding ϱ2 in the CPI-MS model for the 2006-2020 June period) but ϱ2 were negative. It is observed that the persistence degree of short-term shocks is higher than the persistence degree of variances on the dynamic conditional correlation. Therefore, dynamic conditional correlation is less affected by past variances depending on time. Moreover, Wavelet coherence (WTC) figures show that the series have very high coherence areas in the post-currency shock period. Conclusion- As we can see in the GARCH models, it would not be wrong to link this situation to the palliative and short-term monetary policies of the Central Bank. The WTC results are also in line with the Impulse-Response and VAR Analysis results, and especially in the August 2018-August 2020 period, CPI-PPI and CPI-Money Supply and that inflation is affected by PPI and money supply.

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