Watts, D (2002), “A simple model of global cascades on random networks” Proceedings of the National Academy of Sciences of the United States of America, Vol. 99, No. 9. Available at: http://www.pnas.org/content/99/9/5766.full World Bank (2008), “Globalization and international trade”, World Trade Report. Available at: http://www.wto.org/english/res_e/booksp_e/anrep_e/wtr08-2b_e.pdf  BIS central bankers’ speeches  13
The impact of soaring food and energy prices on catering and transport services became more significant in the first quarter of 2010 (Figure 12). Consequently, annual services inflation, which has been declining since the third quarter of 2008, increased by 1.9 percentage points in the first quarter of 2010. Seasonally adjusted data also indicate that price increases in the services group accelerated compared to the previous quarter (Figure 13). The low base of the previous year caused by the tax cuts in durable goods and the inventory destocking process have been major factors accounting for the increase in core inflation indicators (Figure 14). Reverberations of the rise in cost factors and the limited rebound in demand are also seen in the seasonally adjusted data (Figure 15). Parallel to these developments, medium-term inflation expectations, which started to increase in the last quarter of 2009, maintained this trend in the first quarter of 2010 (Figure 16). While expectations displayed an increase in all maturities, the difference between expectations and targets became wider (Figure 17). However, the increase in medium-term expectations remained relatively limited. 2. Monetary policy response  After commenting briefly on inflation developments, I would now like to cover the policies pursued by the Central Bank during the last quarter. Anticipating that inflation would decrease sharply following the last quarter of 2008, the Central Bank of Turkey (CBT) focused on alleviating the potentially harsh impact of the global financial crisis on the domestic economy.