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International Journal of Academic Research in Economics and Management Sciences

Open Access Journal

ISSN: 2226-3624

The Relationship between Consumer Price and Producer Price Indices in Turkey

Volkan Ulke, Ugur Ergun

http://dx.doi.org/10.6007/IJAREMS/v3-i1/607

Open access

In this study we analyze the relationship between the Consumer Price Index (CPI) and the Producer Price Index (PPI) in Turkey. We test long run, short run and causality relationship of these series. Johansen’s cointegration tests present a long run relationship between these series. Vector error correction (VEC) model specification suggests these series move together. There is a unidirectional long run causality from CPI to PPI. On the other hand VEC Granger causality test indicates no causality in short run. Thus our results suggest demand pull inflation in long run.

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(Ulke & Ergun, 2014)
Ulke, V., & Ergun, U. (2014). The Relationship Between Consumer Price and Producer Price Indices in Turkey. International Journal of Academic Research in Economics and Management Sciences, 3(1), 192–205.