INFLATION EXPECTATIONS DERIVED FROM BUSINESS TENDENCY SURVEY OF THE CENTRAL
BANK
Ece ORAL (The Central Bank of the Republic of Turkey)
The expectations obtained from surveys play an important role as leading indicators
for the application of the monetary policies. The expectations can be either
qualitative or quantitative. The qualitative inflation expectations are gathered
from the Business Tendency Survey that is conducted by the Central Bank of the
Republic of Turkey. Different methods like Carlson-Parkin method, Balance method,
Nonlinear regression method are used to quantify the expectations. The quantification
methods are compared with each other. The reliability of the Business Tendency
Survey of the Central Bank is also reviewed. The Cronbach a coefficient is used
to find the reliability and the survey is found to be quite reliable. Besides,
the rationality of the inflation expectations is tested and the formations of
the expectations are examined. The formation of inflation expectations is investigated
and a proper model cannot be found.