The impact of inflation targeting policy on the inflation uncertainty in Turkey

Abstract

Turkey represents a potential laboratory experiment in which the performance of an adoption of inflation targeting regime can be studied. Under this perspective, this article tries to evaluate the effect of Inflation Targeting Policy on inflation uncertainty in Turkey after 2001. An empirical analysis based on ARCH-GARCH method is made in order to create inflation uncertainty series. The findings denote that Inflation Targeting Policy is a powerful strategy in eliminating the inflation uncertainty. © 2013 Springer-Verlag Berlin Heidelberg.