Convergence of Inflation Indices: Evidence from Turkey

Abstract

In this paper, we have investigated whether Consumer Price Index (CPI), its seven basic components (Housing, Food, Clothing, Furniture, Health, Trans- portation, Culture) and Wholesale Price Index (WPI) inflations have converged during the period from 1988:01 to 2007:10. We have found that all series have been converged in respect of the results obtained from the ADF and PP unit root tests. KPSS test results also do not reject the null hypothesis of stationary ex- cept for CPI-Housing and Clothing-Housing.