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Publication Metadata only Foreign ownership, survival and growth dynamics in Turkish manufacturing(Routledge, 2014) Taymaz, Erol; Department of Economics; Yılmaz, Kamil; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 6111The chapter is organized as follows. Section 11.2 provides a brief overview of FDI flows to Turkey followed by brief information on the establishment-level Turkish manufacturing industry data used in empirical analysis. Section 11.3 presents the model and results of the firm survival dynamics. Section 11.4 presents the estimation model and results on the employment growth of domestic and foreign firms. Section 11.5 concludes the chapter.Publication Metadata only Empirical identification of the vector autoregression: the causes and effects of us M2(Oxford University Press, 2009) Hoover, Kevin D.; Perez, Stephen J.; Department of Economics; Demiralp, Selva; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 42533The M2 monetary aggregate is monitored by the Federal Reserve, using a broad brush theoretical analysis and an informal empirical analysis. This chapter illustrates empirical identification of an eleven-variable system, in which M2 and the factors that the Fed regards as causes and effects are captured in a vector autoregression. Taking account of cointegration, the methodology combines recent developments in graph-theoretical causal search algorithms with a general-to-specific search algorithm to identify a fully specified structural vector autoregression (SVAR). The SVAR is used to examine the causes and effects of M2 in a variety of ways. The chapter concludes that while the Fed has rightly identified a number of special factors that influence M2 and while M2 detectably affects other important variables, there is 1) little support for the core quantity-theoretic approach to M2 used by the Fed; and 2) M2 is a trivial linkage in the transmission mechanism from monetary policy to real output and inflation.Publication Metadata only Turkey’s recent trade and foreign direct investment performance(Taylor and Francis, 2009) Izmen, Ümit; Department of Economics; Yılmaz, Kamil; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 6111Over the last decade there have been significant changes in Turkey’s external economic relations. The process of integration of the Turkish economy into the world economy has gained momentum following the Customs Union with the EU in 1996, the economic crisis of 2001 and the EU’s decision to start accession talks with Turkey in December 2004. Current figures on foreign trade, foreign direct investments and other capital flows prove the case. Both internal and external factors contributed to accelerating integration of the Turkish economy with the world economy. Thanks to the persistence in the implementation of macroeconomic and structural reforms, the Turkish economy recovered rather quickly after the 2001 economic crisis. The increased confidence in Turkey’s ability to sustain economic reforms led to a surge in capital inflows. While the increased domestic demand has been the domestic pull factor behind the faster growth performance, the availability of abundant foreign capital since 2003 has been the external push factor behind it. The best way to characterize the Turkish growth experience since 2002 is to emphasize that Turkish growth is domestic demand (consumption and investment) driven. However, the rapid expansion of the domestic demand during this period implies that domestic savings were insufficient to finance the everexpanding domestic investment. When domestic savings are not sufficient the only alternative left to finance the expanding domestic demand is the foreign savings. Actually, this basic characteristic of the Turkish economic growth has been observed since 1980s. Turkey’s growth episodes over the last three decades are almost always financed by capital inflows. This was also the case in the post2002 era. The availability of abundant international capital ready to flow into emerging markets and therefore Turkey led to the real appreciation of the Turkish lira since 2002. This in turn further fueled the demand for imports, worsening the current account deficit. In addition, the secular upward trend in the international price of oil and other raw materials since 2003 contributed to the rapid deterioration of the current account balance, as two-thirds of the country’s imports are raw materials and other intermediate goods.Publication Metadata only Agricultural transformation and the rural labor market in Turkey(Nova Science Publishers, Inc., 2011) İlkkaracan, Ipek; Department of Economics; Tunalı, Fehmi İnsan; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 105635After five decades of transformation, the share taken by agriculture in total employment in Turkey had decreased from 85 percent in 1950 to 36 percent in 2000. Despite significant technological progress, total agricultural employment remained in the 8-9 million range during much of this period. The pace of transformation hastened upon implementation of the Agricultural Reform Implementation Project (ARIP) in 2001. This process placed some two million additional inhabitants in the "surplus labor" category as the share of agricultural employment fell to under 25 percent by the end of 2008. We rely on various data sources to trace the contours of this transformation and examine its manifestations in the rural labor market. Since the transformation burdens the urban labor market with the task of absorbing the surplus labor, we also review the changes that have taken place in urban areas to gauge the prospects. We tease out the demographic manifestations of the transformation by breaking the aggregates down by gender, age, and education. We find that the agricultural labor force is ageing at unprecedented rates as the young and women opt for nonparticipation. Women, who typically contribute to the small family farm as unpaid family labor, face the biggest challenges as the distinctions between the rural economy and the urban economy become blurred. Although there are signs that the rural economy took a more diverse form in the post-ARIP period, rural labor markets do not appear to hold much promise for the working-age population.Publication Metadata only Crises and regional governance attempts: the curious case of Turkey in critical perspective(Palgrave, 2014) Department of Economics; Dönmez, Pınar E.; Undergraduate Student; Department of Economics; College of Administrative Sciences and EconomicsN/APublication Metadata only Modeling and estimation of synchronization in size-sorted portfolio(Central Bank Republic Turkey, 2022) Paap, Richard; van Dijk, Dick; Department of Economics; Çakmaklı, Cem; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; 107818This paper examines the lead/lag relations between size-sorted portfolio returns through the lens of financial cycles governing these returns using a novel econometric methodology. Specifically, we develop a Markov-switching vector autoregressive model that allows for imperfect synchronization of cyclical regimes such as bull and bear market regimes in US large-, mid- and small-cap portfolio returns. This is achieved by characterizing the cycles of the mid- and small-cap portfolio returns in concordance with the cycle of large-cap portfolio returns together with potential phase shifts. We find that a three-regime model with distinct phase shifts across regimes characterizes the joint distribution of returns most adequately. These regimes are closely linked to the business cycle and small-cap portfolio returns are more sensitive to the cyclical phases than the large-cap portfolios. While all portfolios switch contemporaneously into boom and crash regimes, the large-cap portfolio leads the small-cap portfolio for switches to a moderate regime from a boom regime by a month. This suggests that small-cap portfolio adjusts with a delay to the relatively negative news compared to portfolios with larger market capitalization. We document that information diffusion accelerates in response to surprises related to the monetary policy. This reflects a link between financial returns and real economic activity from the viewpoint of 'financial accelerator theory' where portfolios with distinct size serve as a proxy for firm characteristics. (c) 2022 The Authors. Published by Elsevier B.V. on behalf of Central Bank of The Republic of Turkey. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/ 4.0/).Publication Metadata only What has been the role of investment in Turkey’s growth performance?(Taylor and Francis, 2009) Zenginobuz, Ünal; Department of Economics; Altuğ, Sumru; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; N/AIntroduction Investment decisions occupy a central role among the determinants of growth. As empirical studies such as Levine and Renelt (1992) have revealed, fixed investment as a share of gross domestic product is the most robust explanatory variable of a country’s growth. DeLong and Summers (1991) also provide evidence emphasizing the correlation of investment in equipment and machinery with growth. New growth theories have been developed that assign a growthsustaining role to investment. Barro (1990) considers a simple endogenous growth model with infrastructure investment. Rebelo (1991) shows that differences in growth rates across countries may be explained by differences in government policy in an endogenous growth model. In Rebelo’s model, changes in certain policy variables such as an increase in the income tax rate decrease the rate of return to investment activities in the private sector and lead to a permanent decline in the rate of capital accumulation and in the rate of growth. Easterly and Rebelo (1993) study the implications of models that link fiscal policy to growth, and find a positive impact of infrastructure investment on growth. Investment is also the most variable component of GDP, and therefore an understanding of its determinants may shed light on the source of cyclical fluctuations. Policy-makers are typically concerned about the ultimate impact of alternative policy measures on investment. In this chapter, we will examine the record of investment and growth for the Turkish economy over the period 1950-2007 in the light of both the neoclassical growth framework and also new growth theories that assign a growth-sustaining role to investment. Until recently, Turkey’s growth performance has been examined in terms of alternative economic policy regimes such as state-led growth, import-substituting industrialization, and economic liberalization including trade and financial liberalization.1 More recently, attention has turned toward understanding the fundamental determinants underlying this performance.2 This analysis has revealed that total factor productivity (TFP) growth has been typically low in Turkey, and that Turkey’s growth has been driven primarily by capital accumulation. Yet a detailed study understanding the factors determining investment performance in Turkey is not readily available. This is an important deficiency because most if not all of the policy proposals regarding the future of the Turkish economy - be they proposals regarding macroeconomic stability or those aimed at ensuring greater competitiveness - have to do with improving the investment environment in Turkey. Various factors affect investment including macroeconomic instability, corruption, the existence of the informal economy, regulatory and tax policy, to name just a few. In an early paper, Mauro (1995) examines the relationship between corruption and growth for a cross-section of countries (including Turkey). He takes into account the endogeneity of various corruption indicators, and finds that corruption and lack of bureaucratic efficiency lower investment, thereby also lowering growth. Farrell (2004) argues that the existence of a large informal sector tends to create an uneven playing field for firms, thereby deterring investment. Tax policy can also affect the level and composition of investment expenditures. New studies for the US show that tax changes have a much stronger impact on real GDP than previously found, and they trace the source of this effect to the strong (negative) impact of the tax change on investment. (Romer and Romer 2007). The investment tax credit (ITC) has been a popular fiscal tool to influence the level of investment for reasons of macro-stabilization or to stimulate specific sectors. In Turkey, incentives of various forms have been implemented to spur exports, to promote a more equal distribution of investment, and to aid regional development. As we describe below, the record of such incentive schemes is decidedly mixed. Furthermore, high tax and regulatory burdens on the formal economy co-exist side-by-side with a large informal economy, creating a negative incentive structure and impeding efforts at creating a more efficient tax and regulatory system. In this chapter, we will study the record of Turkey’s past investment performance over the period 1950-2007. We will also study the sectoral decomposition of investment. We will examine in depth the factors that are thought to be important for determining investment behavior in Turkey. Given the central role that investment plays in growth, the results of our study will have implications for Turkey’s future economic performance, for its ability to converge to per capita income levels of developed countries, and for the viability of its current bid for European Union membership. © 2009 Selection and editorial matter, Ziya Önis and Fikret Şenses.Publication Metadata only The economic role of the state in Islam(Edward Elgar Publishing Ltd, 2014) Department of Economics; Çizakça, Murat; Other; Department of Economics; College of Administrative Sciences and Economics; 251866N/APublication Metadata only Towards a sustainable debt burden: challenges facing Turkey at the turn of the new millennium(Frank Cass, 2003) Alper, C. Emre; Department of Economics; Akçay, Osman Cevdet; Other; Department of Economics; College of Administrative Sciences and Economics; N/ASince the early 1990s, Turkey has been experiencing a major increase in its public debt. This contribution seeks to investigate the underlying causes of this deteriorating performance from a political-economic perspective. Our analysis, covering the 1990-2000 period, demonstrates that the current debt position of Turkey is unsustainable and that further fiscal austerity is needed. In establishing a link between budget deficits and inflation, one must adopt a very precise definition of the "budget deficit". Indeed, there appears to be a weak connection between the narrow definition of the consolidated budget deficit and inflation. Conversely, a strong connection has been established between the broad concept of the "public sector borrowing requirement" (PSBR) and inflation. In addition, the broad definition should be extended to include duty losses registered by public banks. The policy implications of our analysis are presented in the final section of the contribution. Copyright © 2003 Frank Cass and Co. Ltd.Publication Metadata only Asset pricing for dynamic economies(Cambridge University Press, 2008) Labadie, Pamela; Department of Economics; Altuğ, Sumru; Faculty Member; Department of Economics; College of Administrative Sciences and Economics; N/AThis introduction to general equilibrium modelling takes an integrated approach to the analysis of macroeconomics and finance. It provides students, practitioners, and policymakers with an easily accessible set of tools that can be used to analyze a wide range of economic phenomena. Key features: • Provides a consistent framework for understanding dynamic economic models • Introduces key concepts in finance in a discrete time setting • Develops simple recursive approach for analyzing a variety of problems in a dynamic, stochastic environment • Sequentially builds up the analysis of consumption, production, and investment models to study their implications for allocations and asset prices • Reviews business cycle analysis and the business cycle implications of monetary and international models • Covers latest research on asset pricing in overlapping generations models and on models with borrowing constraints and transaction costs • Includes end-of-chapter exercises allowing readers to monitor their understanding of each topic Online resources are available at www.cambridge.org/altug_labadie. © Sumru Altug and Pamela Labadie 2008.
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