Regional Inflation Convergence in Turkiye: Evidence From Nahar-Inder Convergence Test

Abstract

This study aims to test the existence of the convergence hypothesis for the inflation rates of 26 NUTS-2 regions based on the Nomenclature of Territorial Units for Statistics (NUTS) in Turkiye in the period 2004:1-2022:1 using the Nahar-Inder (2002) convergence test approach. This approach is defined as a polynomial-type convergence technique that can detect the presence of convergence even when the series studied are not stationary and allow the determination of units that show different behaviour patterns within the examined group. The study's findings, in which this technique was used for the first time in the relevant literature, indicate a strong inflation convergence among regions in Turkiye during the review period and that the implemented monetary policy can be effectively used.