Is the Action or Discourse of the Central Bank of the Republic of Türkiye More Effective on Expected Inflation?

Authors

  • Mustafa Batuhan Tufaner Department of Economics, Istanbul Beykent University, Türkiye https://orcid.org/0000-0003-0415-4368
  • Nezir Köse Department of Economics, Istanbul Beykent University, Türkiye
  • Ali Talih Süt Department of Economics, Istanbul Beykent University, Türkiye

DOI:

https://doi.org/10.2298/PAN240405017T

Keywords:

Monetary policy , Central bank communication , Expectation management , SVAR

Abstract

This study examines the effects of central bank discourse (tone index), action (policy rate), and actual inflation on expected inflation for Türkiye using monthly data between 2020 and 2024 via the SVAR model. Empirical findings demonstrate that the tone index has a statistically significant negative effect on expected inflation for one month, while actual inflation has a statistically positive effect for two months. These results suggest that the CBRT’s discourse, rather than its action, has a greater impact on expected inflation in the short term. In addition, the findings indicate that actual inflation has a significant impact on expected inflation in the short run.

JEL: C32, E52, E58

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Published

22.05.2025

How to Cite

Tufaner, M. B., Köse, N., & Süt, A. T. (2025). Is the Action or Discourse of the Central Bank of the Republic of Türkiye More Effective on Expected Inflation?. Panoeconomicus, 1–28. https://doi.org/10.2298/PAN240405017T

Issue

Forthcoming

Section

Original scientific paper