CEBA talks 2020-2024
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Tell Me Somethin’ Girl. Are You Happy in This Modern World? By Lady Gaga & Bradley Cooper in “A Star is Born” I Will Tell You About 500 Years of Ottoman Prices!

Authors: Sule Akkoyunlu

Abstract: On the one hand, Barkan (1970; 1975) argues that the Price Revolution of the 16th century was the main cause for the economic decline of the Ottoman and the Near East. He demonstrated that the prices of food and raw materials increased more than fivefold based on the data from the Ottoman archives and these increases were imported through trade with Europe across the Mediterranean. On the other hand, Pamuk (2001, 2004) argues that Ottoman inflation can be explained by debasements rather than the silver inflation. This study investigates the long-run and short-run relationship between consumer price inflation (nominal inflation) and food inflation; and the long-run and short-run relationship between consumer price inflation in grams silver and food inflation in grams silver over 500 years by allowing structural shifts and outliers in an autoregressive distributed-lag (ADL) model. The results show that expressing prices in grams of silver can indeed remove most of the structural shifts and outliers in the series, however, there still remain unexplained parts that might require nonlinear modelling. In addition, the shift and outlier dates that are detected in both nominal inflation and silver inflation series can be explained by population growth, urbanisation, the popular periodic markets and market fairs that allow high prices for rural products, changes in the velocity of circulation of money, the emergence of other forms of money such as letters of credit and bills of exchange and the development and expansion of credit relations, wars, and rural taxes that suggests a complete model of inflation determination, even in the Ottoman era.

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