Chaotic characteristic of inflation-unemployment relation in Turkey

Abstract

In this paper, it was purposed to analyze the chaotic pattern of inflation-unemployment relation for the period from January, 1960 to April, 2019 in Turkey. For modelling this relation, oil prices were considered as an exogenous variable in examination of chaotic causal relation between inflation and unemployment. This model was applied in two stages: Firstly, the chaotic structure of the variables were determined by using Lyapunov Exponents and Henon Map and secondly by Hristu-Varsakelis and Kyrtsou(2010) [1] and Bai(2018) [2] Chaotic Causality Tests, the chaotic causal relations among the variables were decided. Because, these estimations are crucial especially for analyzing complex economic system of countries.In this paper, it was purposed to analyze the chaotic pattern of inflation-unemployment relation for the period from January, 1960 to April, 2019 in Turkey. For modelling this relation, oil prices were considered as an exogenous variable in examination of chaotic causal relation between inflation and unemployment. This model was applied in two stages: Firstly, the chaotic structure of the variables were determined by using Lyapunov Exponents and Henon Map and secondly by Hristu-Varsakelis and Kyrtsou(2010) [1] and Bai(2018) [2] Chaotic Causality Tests, the chaotic causal relations among the variables were decided. Because, these estimations are crucial especially for analyzing complex economic system of countries.