The Unassuming Economist

From a paper by Ahmet Niyazi Özker:

“This study examines the possible inflation scale effects of inflation rates observed in emerging market economies on countries with similar economic structures to Turkey. For this purpose, the role of inflation in the emergence process of emerging market economies and the potential fiscal impact costs of this process on Turkey, especially on public finance and tax burden, are analysed. The study focuses on the approach that countries among emerging market economies are in an inflationary interaction through mutual scale effects, and that this interaction mutually increases their cost burdens. The research also tries to reveal whether these increasing fiscal burdens create a budgetary drag effect in Turkey and investigates at what scale levels these effects occur. In addition, the study also evaluates the financial consequences of the scale effects brought about by economic growth in Turkey as related to the inflation rates in Turkey. The findings in the survey reveal that inflation in Turkey is primarily structural, and an inflationary process prevails in which cost inflation remains relatively secondary. In other words, this structural reality shows that the Turkish economy is directly affected by structural inflation dynamics that are effective on a global scale and that this effect also causes an increase in financial burdens at the local level. When this situation is evaluated in terms of the fiscal tax burdens related to emerging markets, specifically in Turkey, it is understood that inflation is shaped not only by national internal dynamics but also by similar structural economic problems at the global level, and that the pressures to increase the inflation rates in Turkey also bring the potential for a possible fiscal drag on the agenda.”