Analysis of food inflation convergence in NUTSII regions of Türkiye

Abstract

In this research, it is examined whether the increase in food inflation observed in Turkey in recent years due to global factors as well as the slowdown in food inflation convergence among regions. In this context, the research aims to analyze the food inflation convergence among NUTS II regions. Since it takes into account the effect of global shocks, tests that take structural break into account are used. In addition, first and second generation tests that do not take into account the structural break are also used and the all test findings are compared. The findings differ according to the consideration of horizontal cross-section dependence and structural break. In addition, the findings also vary according to the a priori determination of the structural break. According to the findings of the test taking into account the soft break, the existence of food inflation convergence among regions except TR83 region is found. The second generation test findings also support this result. In line with the findings, it is concluded that the increase in food inflation observed in Turkey in recent years is not due to the slowdown in food inflation convergence across regions.