Abstract:

The shift in inflationary circumstances during the past 10 years in Turkey has provided a window into the country's economic strategy. This study refers to the shift in inflationary circumstances as the "single-digit inflation period" before 2017 and the "double-digit inflation period" after 2017 as a result of this point of view. It is clear that the Turkish economy has added financial stability, which takes into consideration macroeconomic risks, as well as price stability to battle inflationary conditions, to its set of policies since 2011, when it began to emerge from the conditions of the global crisis. The impacts of the TL/USD exchange rate and the growth rate of the total loan volume on inflation in the context of the exchange rate, which is hotly contested in Turkey, are examined for the period of 2011–2021, which is the focus of the empirical application of this study. Comparative analyses are done on the previous 10 years of inflation in Turkey as well as the crucial period of 2017–2021. The "Fourier-Shin" cointegration test based on Fourier functions and the DOLS method for long-term coefficient estimate were utilised in the context of this investigation. The results demonstrate that loan expansion has been a significant factor in Turkey's inflation during the whole period, but exchange rate pass-through has been more significant in the post-2017 period.

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