An empirical analysis on the effect of oil prices on producer price inflation in Türkiye

Oil is one of the backbones of the economic structure of the world we live in today and plays an important role in Türkiye's economy. Since Türkiye is an energy importing country, it is deemed important to investigate how the changes in global oil prices would affect inflation in Türkiye. The methodology utilized in this thesis was using a ARDL model for the relationship between the changes in the domestic producer price in Türkiye, the changes in the exchange rates, the changes in the Eurozone total industrial producer price index, the changes in the prices of futures contracts of oil, the changes in the minimum wages and the changes in the money supply and a dummy variable. The outcome suggests that there is a statistically significant and positive relationship between the changes in the prices of futures contracts of oil and the changes in the domestic PPI of Türkiye in the above mentioned forms.