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In this paper, ‘the Turkish Currency Reform’ is elaborated. Mainly it involves the deletion of six zeroes from the currency. The endowment effect, the anchoring effect and the money illusion are investigated contrasting the new and old Turkish currencies. Furthermore, the naïve inflation understanding is probed. The findings suggest that the deletion of six zeroes does not have automatic results that are expected by the policy makers: The citizens are not homogeneous in their understanding of inflation. Though the endowment effect is not observed in general, it exists in the transactions of the buyer thinking in terms of the new currency and the seller thinking in terms of the old currency. Citizens tend to make higher valuations when no anchors are provided in the new currency in contrast to the old one. Unexpected findings have emerged concerning the money illusion. The data are interpreted and the policy implications are discussed.
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