Özet:

In this study, the validity of the Phillips curve in the short and long term for Türkiye is analyzed by using a data set including inflation and unemployment data between 1960 and 2022, by using the multiple structural breaks unit root test introduced by Carrion-i-Silvestre et al. (2009) and the multiple structural breaks cointegration test introduced by Maki (2012) that consider multiple structural breaks and, Newey-West HAC Estimator. This study aims to make an important contribution to the literature in terms of considering the multiple structural breaks while empirically examining the relationship between variables to obtain the relationship between variables unbiased, on the other hand, -unlike other studies- using both the largest data set covering the 1960s and the most up-to-date data set in empirical analysis. Findings demonstrate that the Phillips Curve is not valid in Türkiye in the long run, but there is a significant inverse relationship (trade-off between inflation and unemployment) in the short run. The short-term results demonstrate that a 1-unit increase in the unemployment rate reduces the CPI by 0.49. These results are compatible with Monetarist and New Keynesian views and provide important clues for policymakers. Accordingly, a series of monetary and fiscal policy recommendations are presented to policymakers in the study based on the views advocated by the New Keynesian and Monetarist economics.

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