Globalization and flattening of Phillips Curve in Turkey between 1987 and 2007

► We study the relationship between globalization and domestic inflation rate. ► OLS estimations point out that global output gap has an effect on inflation rate. ► TVP estimations indicate the coefficient of domestic output gap declined over time. ► It hampers the ability of monetary policy to stabilize prices and economic activity. ► CBRT should pay even more attention to developments of the global output gap.