The purpose of the current study is to investigate the degree of inflation persistence, its geographical variation, sources of cross‐regional variation, and presence of geographical/sectoral aggregation bias in national monetary policy. Our data set covers 26 NUTS‐2 level Turkish regions and monthly CPI inflation over the period 2003–2019. We first estimate the degree of regional inflation persistence by autoregressive regressions, check its robustness against the presence of structural breaks (by Bai–Perron's algorithm) and nonlinearities (by Markovian Regime Switching regressions). Second, we examine the possibility of geographical and sectoral aggregation bias. Third, we investigate the cross‐regional determinants of inflation persistence by panel data analysis, employing hybrid‐effects spatial panel regressions. We analyze the direct and indirect effects of the determinants and test for regional spillover effects. Three main results are obtained. First, estimated persistence degrees are heterogeneous across regions. The geographical pattern is empirically robust against structural breaks and nonlinearities. We find that inflation persistence is distributed in a spatially correlated manner. Second, when sectoral and regional aggregation bias is tested, only sectoral aggregation indicates a considerable level of bias. Third, we find that the presence of large firms in the region and a higher share of agricultural output in GDP leads to lower persistence, while an increased share of industrial output, and increased trade volume leads to higher inflation persistence. Moreover, we find spatial spillovers of price variability evident in regression analysis. From a policy standpoint, it is required that structural policy programs are targeted to maintain flexibility in the regions where persistence is high (i.e., providing market entry/exit, institutional quality, policy credibility, stimulation of SMEs). Moreover, sectors that have high persistence, such as Hotels and Restaurants (persistence degree 0.55) and Health Services (0.39) should be weighted more in CPI calculations.

中文翻译：

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土耳其的区域通货膨胀持续性

本研究的目的是调查通货膨胀持续性的程度，其地域差异，跨地区差异的根源以及国家/货币政策中地域/部门总体偏差的存在。我们的数据集涵盖了2003年至2019年期间26个NUTS-2级土耳其区域和CPI每月通货膨胀。我们首先通过自回归回归估计区域通货膨胀持续性的程度，针对结构性断裂（通过Bai-Perron算法）和非线性（通过马尔可夫制度转换开关）的存在检查其稳健性。其次，我们研究了地理和部门聚合偏差的可能性。第三，我们通过面板数据分析，使用混合效应空间面板回归研究了通货膨胀持续性的跨区域决定因素。我们分析了决定因素的直接和间接影响，并测试了区域溢出效应。获得了三个主要结果。首先，估计的持久性程度在各个区域之间是异构的。地理模式在经验上对结构断裂和非线性具有鲁棒性。我们发现通货膨胀持续性以空间相关的方式分布。其次，当测试部门和地区的总体偏差时，只有部门的总体水平表明存在相当大的偏差。第三，我们发现该地区大公司的存在和农业产出在国内生产总值中的较高份额导致持久性降低，而工业产值份额增加和贸易量增加导致通货膨胀持久性更高。此外，我们发现回归分析中明显体现了价格变异性的空间溢出效应。从政策角度来看，要求结构性政策计划的目标是在持久性较高的地区保持灵活性（即提供市场准入/退出，机构质量，政策信誉，刺激中小企业）。此外，对于持久性较高的行业，例如旅馆和饭店（持久度为0.55）和卫生服务（0.39），应在CPI计算中给予更大的权重。