A Bayesian causal map for inflation analysis: the case of Turkey

Abstract

This paper proposes the use of Bayesian Causal Maps (BCM's) to analyze the complex structure of inflation in Turkey. In this study, a model of inflation is initially structured using a cognitive mapping technique; the dependent probabilities of the concepts are then calculated based on the detailed analysis of past data. Finally, a BCM is used to analyze the complex structure of inflation in Turkey. As a result, it will be possible to see the structure of the inflation model and to understand the basic consequences of any strategic change that may occur in the system.