TIME SERIES ANALYSIS: A CASE STUDY ON FORECASTING TURKEY’S INFLATION AND UNEMPLOYMENT

Abstract

Economic strategies and policies of a country is the most important factor of complete employment and secure economy throughout low inflation. This case study focused on unemployment and inflation for a particular period from 2000 to 2014. Statistical data for the period 2000 to 2014 was collected from a Turkish statistical institute website.

The first intention of this research is to forecast inflation and unemployment for 2015 and 2016. Inflation and unemployment has forecasted by autoregressive model as a time series method.

The second intention of this research is to determine the relationship between unemployment and inflation in Turkey for the period 2000 to 2014, through Phillips curve, which is conducted in 2014 and the simple linear regression analysis were used. The result shows that unemployment negatively effects inflation in Turkey economy and it was seen that there was a statistically significant relationship between inflation and unemployment.