Turkish Economic Review
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Sukuk in the World and Turkey
Full text linkAbstract. As a result of globalization, the integration initiatives of the international financial markets cause various problems. Moreover, these problems are not only limited to the country in which they occur, but can also spread to other countries by snowball-effect or transmission. When we review the world financial history, countries have often experienced financial crises in recent years. At the same time, they have developed various methods to eliminate or reduce the negative effects of crises. Sukuk issues made in a country change the effects of the financial crisis that country is exposed to. This is mainly because of the fact that the Sukuk instruments are insensitive to interest. In this paper, the case study method has been adopted. In accordance with this method, it is intended to make an assessment of the sukuk applications in the world and in Turkey.Keywords. Sukuk, Capital movements, Global financial crisis.JEL. G10, G15, G20, G21
Exchange rate policy and sectoral competitiveness in Morocco: Vector autoregressive model
Full text linkAbstract. The objective of this work is to study the exchange rate policy and its impact on sectoral competitiveness in Morocco. For this issue we used a VAR econometric model with annual data covering a period from 1990 to 2020. As a result of this study, we found that the exchange rate policy adopted and applied by the Moroccan monetary authorities showed that the real effective exchange rate experienced an appreciation that is, a loss of competitiveness. Thus, the monetary authorities have chosen the second course of action which is the gradual flexibility of the exchange rate regime and the improvement of the weak performance of exports. This is done through the diversification of production structures on the one hand and the diversification of exports on the other. Indeed, the overvaluation of the national currency results in a loss of competitiveness towards foreign countries, which means that domestic goods cost more than they should. Conversely, when the domestic currency is undervalued, this allows a gain in competitiveness.Keywords. Competitiveness, Exchange rate policy, VAR, Production structures, Diversification of exports..JEL. C01, C50, E10, E60, F02, F30, F41
Edward Nelson, Milton Friedman & Economic Debate in the United States: 1932-1972, Volume 1
Full text linkAbstract. Edward Nelson writes an intellectual history of Milton Friedman, who was a thought leader at the University of Chicago. Friedman is mostly known for his work in macroeconomics and policy, but he also did important work in microeconomics and statistics. His macroeconomic demand and supply framework extend into policy, where his work continues to influence economic debate.Keywords. Monetary policy, Milton Friedman, Economic debate.JEL. B21, D00, D20, D40
Imperative of corporate governance on industry's profitability: An empirical study of privatized cement industry in Nigeria
Full text linkAbstract. The study investigates the imperative of corporate governance on profitability of privatized cement industry in Nigeria. The variables studied were Rate of Returns as dependent variables and fourteen Corporate Governance proxies as independent variables. Data was collected from secondary sources, and the statistical tools employed in the Methodology were descriptive statistics and Pooled OLS regressions. The study aimed at bridging literature gap on studies that relate corporate governance and privatization policy in Nigeria. The results suggest that, no remarkable improvement of profitability post privatization due to challenges of exogenous factors such as macroeconomic environment instability and weak private sector. The industry witnessed changes in corporate governance such as adopting effective cost management and proactive business strategies, exposure to competition, withdrawal of Government subsidy and special grant post privatisation. Board Size and Workforce have positive and significant impact on Cement industry’s profitability, while, State Ownership, Institutional Ownership, Minority ownership, Percentage of Executive Directors and Privatization with time have negative and significant impact on company’s profitability. Conversely, Foreign Investors, Percentage of Non-Executive Directors and Percentage of Management Staff have positive and insignificant impact on the Cement industry’s profitability. Thus, it will be pertinent to conclude that the result has accepted Alternative Hypothesis that corporate governance has significant impact on the Cement industry’s performance (AROA), despite the challenges of microeconomic environment instability. The study recommends that, Government needs to stabilize macroeconomic environment and strengthen private sector. The Cement Industry needs to ensure right procedure of the selection of Non-Executive Directors, create incentive for foreign investor participation, ensure Payment of dividend, less government interference and accountability. Mechanisms such as efficient and independent audit committee, competent executive directors and professional management team need to be put in place to address the negative and insignificant impact of management staff on the industry.Keywords. Corporate governance, Profitability, Privatization, Cement industry.JEL. C01, C50, E10, E60, F02, F30, F41
Fiscal versus Monetary Policy in the 1960s
No full textAbstract. In this lecture, Milton Friedman reviews the role of fiscal and monetary policies on the course of the U.S. business cycle, during several episodes from 1961 to 1969. He relates these developments to shifts in contemporary popular and scientific opinion about the determinants of the business cycle. In each episode of expansion or contraction, he shows that monetary policy – in the sense of changes in the rate of growth of the quantity of money – was at least as important as fiscal policy in determining the pace of economic activity and the rate of inflation, and always dominated when these policies were moving in opposite directions. During the lecture, Friedman makes several digressions to explain the variability of the lag in effect of monetary policy, the reason why interest rates are a poor guide to the stance of monetary policy, and why the downward-sloping liquidity preference function is a poor model that fails to comport with the real world. He also explains why tax increases are not necessarily contractionary, and why tax decreases are not necessarily expansionary.Keywords. Quantity theory, Monetary policy.JEL. E50, E53, E63
Anne Case & Angus Deaton, Deaths of Despair and the Future of Capitalism
Full text linkAnne Case and Angus Deaton in Deaths of Despair and the Future of Capitalism attribute much of the increase in white mortality in opioid overdose deaths to the US pharmaceutical industry and a failed US health care system. They extend human capital to health and economic progress outcomes unique to white US populations since the 1960s. Case and Deaton and Deaths of Despair add to this literature that links education, human capital, and white deaths of despair.Keywords. Monetary policy, Government, Good Government.JEL. B21, D00, D20, D40
A quantity theory framework for thinking about monetary policy
Full text linkAbstract. In August 2020, FOMC chair Jerome Powell announced a strategy for achieving an inclusive value of the FOMC’s goal of maximum employment. The strategy rests on discovering the minimal value of sustainable unemployment by running the economy above potential until the unemployment rate declines to a level that initiates an inflation overshoot from the FOMC’s longer-run 2 percent target. There is presumably no contradiction with an FOMC target for inflation of 2 percent. As indicated by the appellation “flexible-average-inflation targeting” (FAIT), the inflation overshoot would compensate for prior undershoots of the 2 percent target. The FOMC’s current framework is reminiscent of the 1970s. With a country fractured over the Vietnam War and a militant civil rights movement, a socially desirable low unemployment rate became a political imperative. FOMC chairman Arthur Burns accepted the challenge (Hetzel 1998, 2008, Ch. 8). The Keynesian consensus of the time promised to deliver a socially desirable rate of unemployment at least as low as 4 percent at the cost of only moderate inflation. This desirable Phillips curve trade-off between unemployment and inflation became the centerpiece of monetary policy. Modigliani & Papademos (1975 and 1976) provided the organizing principle for monetary policy. Namely, there is a predictable and “exploitable” trade-off in which changes in inflation depend upon the difference between the unemployment rate and a full-employment rate termed the nonaccelerating inflation rate of unemployment (NAIRU). At least in 2021, however, the FOMC assumption is that there is no trade-off because the Phillips curve is assumed flat at least down to its prepandemic low of 3.5%. When persistent inflation above 2% emerges, the adjective “flexible” in FAIT becomes relevant. The FOMC will then trade off between two competing goals – 2% inflation and inclusive maximum employment.Keywords. Quantity theory, Monetary policy.JEL. E50, E53, E63
Paul A. Volcker & Christine Harper, Keeping At It: The Quest for Sound Money and Good Government
Full text linkAbstract. The Federal Reserve chair Paul Volker led the US through its tumultuous 1970s and 1980s. His biography, Keeping at It, chronicles his thinking and actions throughout his time in public service.Keywords. Monetary policy, Government, Good Government.JEL. B21, D00, D20, D40
