The relationship between inflation and interest has been the subject of research for both economists and policy makers for many years. To understand this relationship between interest and inflation, the Fisher hypothesis is of great importance as a basis. The Fisher hypothesis states that there is a long-run relationship between the nominal interest rate and the inflation rate. The aim of this study is to investigate the validity of the Fisher hypothesis for Turkey. For the analysis, it was utilized alternative nominal deposit interest rates and consumer and producer price indexes by using quarterly data belonging 2000:2 and 2018:1 period. The main difference of this study from other studies in the literature is the use of stationarity and cointegration tests which take Fourier functions into account in the analysis. In this context, Fourier KPSS stationarity test developed by Becker, et al (2006) and Fourier Shin Cointegation test developed by Tsong, et al (2016) are used to test the validity of the Fisher hypothesis in Turkey. Findings provide no evidence to support the Fisher hypothesis in Turkey.
The relationship between inflation and interest has been the subject of research for both economists and policy makers for many years. To understand this relationship between interest and inflation, the Fisher hypothesis is of great importance as a basis. The Fisher hypothesis states that there is a long-run relationship between the nominal interest rate and the inflation rate. The aim of this study is to investigate the validity of the Fisher hypothesis for Turkey. For the analysis, it was used alternative nominal deposit interest rates and consumer and producer price indexes by using quarterly data belonging 2000:2 and 2018:1 period. The main difference of this study from other studies in literature is the use of stationarity and cointegration tests that take Fourier functions into account in the analysis. In this context, the Fourier KPSS stationarity test developed by Becker, et al (2006) and the Fourier Shin Cointegration test developed by Tsong, et al (2016) are used to test the validity of the Fisher hypothesis in Turkey. Findings provide no evidence to support the Fisher hypothesis in Turkey.
Alan : Sosyal, Beşeri ve İdari Bilimler
Dergi Türü : Ulusal
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