Relationship Between Inflation and Interest Rates in the Turkish Economy: 1980- 2018 Period

Abstract

In this study ,the causality relationship between inflation and interest rates is examined.Working for Turkey's economy in 2003: 1-2018: 4 period using data on inflation and interest rates were estimate dusing data sets Engle Granger causality relation ship between the series analys is method to be used. According to the results of the analysis, the series were logoritized and the series were stabilized by Phillips-Perron and ADF unit Root Tests. After applying Engle Granger Causality Analysis, Johansen cointegration analysis was conducted to determin the causality relation ship between inflation rates and interest rates. According to the finding sobtained from the analysis, it is observed that there is a causality relationship from inflation rates to interestrates, where as there is no causality relationship from interest rates to inflation rates.