Title: Examination of the Relationship between Producer Price Index and Consumer Price Index: ARDL Bounds Testing Approach
Abstract: Producer price index and consumer price index are used instead of each other for calculating inflation rate and various economic indicators. However, if there is a long-run relationship between the variables, this process can provide effective results. Otherwise, the results vary according to the price index. Therefore, in this study, long and short-run relationships between producer and consumer price index was investigated. As a result of analysis performed with ARDL, bounds test for the period of 2010:m5-2016:m4 in Turkey, bi-directional and statistically significant causality has been found between Consumer Price Index (CPI) and Producer Price Index (PPI) both in the short and long run.