The Effects of Oil Prices on Inflation and Growth: Time Series Analysis in Turkish Economy for 1988:01-2013:04 Period
International Journal of Economics and Research, Vol. 5, No. 2, pp. 29-36, March 2014
8 Pages Posted: 22 May 2014
Date Written: March 1, 2014
In this study, the analysis was that the capacity of creating inflation depends on oil prices as the one of energy types that is a major input of aggregate output which becomes a source of economic growth with increasing in costs. The aggregate output is also a function of energy that is the one of production inputs. Moreover, energy is an imported by several countries because it is acquired from the limited sources around the world. It causes inflation of importing countries to exporting countries through oil prices. At the same time, the rises of oil prices causes inflation because it increases the product costs. The second argument is that the increasing of aggregate output is generally affected by energy use, and is privately affected by oil use. In that case, oil import is both efficient on inflation and on growth. Tested hypothesis in the study is that oil prices have an inflationary effect because of its effect on costs, and is that this activity will negatively affect the growth because of its effect on expectations. In this study, the effects of the crude oil import of Turkey for inflation and growth are analysed over the long term. The committed analyses show that GDP was affected by oil imports, and it also caused inflation in the Turkish economy.
Keywords: Oil Import, Inflation, Economic Growth
JEL Classification: C32, E31, O40, Q43
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