EXCHANGE RATE PASS-THROUGH IN TURKIYE: A SYSTEMATIC LITERATURE REVIEW

Abstract

This study examines empirical research on exchange rate pass-through in Turkey within the framework of a systematic literature review. Exchange rate pass-through refers to the degree to which changes in the exchange rate are reflected in the general level of domestic prices and is an important concept, particularly in open and import-dependent economies, in terms of inflation dynamics and the effectiveness of monetary policy.

The Turkey-focused literature in this study has been classified and evaluated comparatively in terms of the data sets used, the econometric methods applied, and the empirical findings obtained. The results of the review show that exchange rate pass-through in Turkey is generally partial, with pass-through to producer prices being stronger and faster than pass-through to consumer prices. Furthermore, many studies emphasize that price responses to exchange rate shocks exhibit an asymmetric and non-linear structure.

The findings of the review reveal that the use of non-linear methods has increased in recent years, while micro-level and sector-based analyses remain limited. In this respect, the study highlights the main trends and research gaps in the literature on exchange rate pass-through in Turkey, providing a guiding framework for future research.