Research Information System
19. ULUSLARARASI İSTANBUL BİLİMSEL ÇALIŞMALAR KONGRESİ, İstanbul, Turkey, 28 - 30 April 2026, (Full Text)
ABSTRACT
This study examines the short-run
determinants of industrial production growth in Türkiye by focusing on
inflation shocks, crisis episodes, and economic uncertainty. Using monthly data
for the period 2006M1-2024M12, the analysis begins by evaluating the
time-series properties of the variables and testing for the existence of a
long-run equilibrium relationship. The unit root evidence indicates that the
variables do not support a clean and uniform levels-based specification,
particularly because the consumer price index exhibits a strong non-stationary
trend. Consistent with this finding, ARDL bounds tests fail to provide evidence
of cointegration between industrial production, economic uncertainty, and the
selected macroeconomic controls. The empirical strategy therefore shifts from a
long-run framework to a short-run dynamic specification. Short-run dynamics are
estimated using Newey-West regressions in which industrial production growth is
modeled as a function of its own lags, economic uncertainty shocks, monthly
inflation, changes in consumer confidence, and crisis-period dummies. The
results show that industrial production growth in Türkiye is primarily driven
by its own short-run adjustment dynamics, inflation shocks, and major crisis
episodes. In particular, inflation exerts a statistically significant and
economically meaningful effect, although its impact is distributed across
adjacent lags and is not monotonic in sign. The 2008-2009 global financial
crisis and the COVID-19 period are found to have large and strongly negative
effects on industrial production growth. By contrast, the effect of economic
uncertainty is weak, statistically fragile, and non-robust in cumulative terms.
Similarly, changes in consumer confidence do not provide additional explanatory
power once inflation and crisis effects are taken into account. Robustness
checks based on alternative lag structures confirm the stability of the main
findings. Overall, the results suggest that short-run industrial production
growth in Türkiye is better explained by inflationary disturbances,
crisis-related disruptions, and internal cyclical adjustment than by a direct
and stable economic uncertainty channel.
Keywords: Industrial production growth;
economic uncertainty; inflation shocks; crisis episodes; Newey-West