We find that such episodes generally brought about significant disinflation, underpinned by weak labor markets, slowing wage growth, and, in many cases, falling oil prices.
If anything, the disinflation programme was a victim of its own success: inflation and interest rates fell so sharply last year that the economy boomed.That encouraged Turks to start splurging on imports, and investors began to worry that inflows of foreign capital might not be big enough to finance the deficits caused by spendthrift consumers and the perennially penurious government.
That said, disinflation has tended to taper off at very low positive inflation rates, arguably reflecting downward nominal rigidities and well-anchored inflation expectations.
The higher cost of financing its debt will hit the government's deficit targets, another critical component of the disinflation programme.The last time Turkey reached such a pass, in November, a timely dollop of cash from the IMF bailed the government out.
So far, inflation targeting has locked in low inflation rather than brought about major disinflation.
First, the literature suggests that we should not expect accelerating disinflation in the presence of large output gaps.
Real output remains below its pre-recession peak, 15m Americans are unemployed, disinflation continues, and the Europeans stand ready to provide a reinforcing gust of bad news whenever growth looks a little too healthy.
IF YOU were to draw the path of inflation in the typical big, rich economy over the past half century, your picture would look much like a dromedary's back: a low flat line in the 1960s; a knobbly hump of high and volatile price rises in the 1970s; dramatic disinflation in the 1980s; and low, stable inflation rates since.
Mr Cotarelli says that, although the disinflation effort is not over yet, it "has arrived at a point of no return".The most immediate challenge facing Mr Temizel is to rehabilitate and sell eight troubled banks taken over by the government in the past two years.
In the 1980s, disinflation was the explicit goal of monetary tightening.
For example, it is likely that the trade-off facing policymakers in the United States has changed as a consequence of disinflation in the 1980s.
