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The Distribution of The Inflation in Turkey

Author

Listed:
  • Nazif Catik

    (Ege University, Department of Economics, Izmir-Turkey.)

  • Ozlem Onder

    (Ege University, Department of Economics, Izmir-Turkey.)

Abstract

This paper investigates distribution of inflation items using various measures of skewness and kurtosis for Turkey covering the period 1996-2007. Considering sensitivity of traditional distribution measures to outlying observations robust skewness and kurtosis are also computed as a novelty. Analysis results mainly reveal that inflation components are right skewed and fat tailed as documented by the previous studies. However due to possible effects of the outliers traditional measures, in particular skewness, are lagging behind the robust measures in identifying underlying dispersion. Therefore one can say that weighted mean inflation used to measure general price changes is not trustworthy and a biased estimator of central location. Our results further suggest that core measures based on constant and symmetric trimming applied by the previous studies for Turkey is somewhat deficient since skewness of the data is ignored in the estimation process. Therefore, to obtain more reliable information in monitoring general price movements we suggest use of asymmetric trimmed means estimators which allows trimming different percentages from each tail of the distribution.

Suggested Citation

  • Nazif Catik & Ozlem Onder, 2010. "The Distribution of The Inflation in Turkey," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 10(2), pages 613-625.
    • Handle: RePEc:ege:journl:v:10:y:2010:i:2:p:613-625
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    References listed on IDEAS

    as
    1. Carlos Robalo Marques & João Machado Mota, 2000. "Using the asymmetric trimmed mean as a core inflation indicator," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    2. Luc Aucremanne, 2000. "The use of robust estimators as measures of core inflation," Working Paper Research 02, National Bank of Belgium.
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    More about this item

    Keywords

    Inflation; Robust Skewness and Kurtosis;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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