Turkish Economic Review
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The effect of foreign trade on economic growth: The case of Turkey
Get PDFAbstract. In this study, the causal relationships between export, import and economic growth in Turkey are analysed, using quarterly data from 1987 to 2017. In order to examine these relationships a number of econometric methods are applied, such as the Augmented Dickey-Fuller Unit Root Test, Johansen Cointegration Test and Granger Causality Test based on the Error Correction Model. The results show that all variables are stationary in the first difference. Furthermore, the validity of long-run relationships among variables is found by the Johansen cointegration test. Since the cointegration is observed between series, the Error Correction Model is used to determine the causality. The empirical findings from the causality test suggest that there is short-term bidirectional causality between economic growth and import in Turkey. On the other hand, according to the Error Correction Model, there is a long run unidirectional causality from economic growth to export in Turkey.Keywords. Export, Import, Economic growth, Cointegration, Causality, Error correction model.JEL. E40, F32, F36, G15
Deficit finance and developing economies Implications and results
Get PDFAbstract. This article discusses briefly various aspects and forms of deficit financing in modern economies. It deals with deficit financing (i) within countries and (ii) between the member countries of the International Monetary Fund (IMF} and that institution as aid provider to a member in difficulty. In (i) it elaborates on the use of deficit financing as an instrument to part fund development, role in crisis management and inflationary consequences. In (ii) it briefly sees deficit financing on a global scale, explain IMF conditionality and the sort of programs it envisaged the aid seeking members to follow; it presents illustration and critique of the instrument each case.. In conclusion it contains some observations including a few policy suggestions.Keywords. Deficit financing, Economic development, Inflation, IMF conditionality, Financial turmoil.JEL. E30, E31, F35
Is rentier capitalism that bad? Rent, efficiency and inequality dynamics
Get PDFAbstract. The current economic context shows a tendency to inequality and rather weak growth. Rent-seeking behavior is often blamed for that. The purpose of this paper is to analyze the consequences, on the accumulation trajectory, of the existence of a rent levied by the rich on the poor. The model is inspired by the articles Stiglitz (1969), Schilcht (1975) and Bourguignon (1981). In particular, convex saving is used. We seek to see to what extent the introduction of a rent may call into question the Pareto-superiority of inequality proved by Bourguignon (1981) or alter the risk of decline highlighted in Mabrouk (2016). Within the limits of the assumptions of the model and of the numerical simulations carried out, we arrive at interesting and rather unexpected observations. Namely, a moderate rent levied by the rich on the poor may not only allow a Pareto-improvement of the economy and prevent the risk of decline, but also, it may unlock the economy from under-accumulation trap even if initial capital endowment is insufficient. The disadvantages of such a rent for the poor are felt only if the economy approaches or exceeds the golden rule where the net marginal productivity of capital is zero.Keywords. Inequality dynamics, Neoclassical growth, Rent, Efficiency.JEL. D99, E13, E21, E22, O41
Development induced displacement of rural communities in India: A critical review
Get PDFAbstract. This article analyses the impact of recent modernisation-led development on rural communities, emphasising particularly their loss of land and of access to common land. Displacement of rural communities from their natural habitats results in a host of socio-economic impacts. This study will focus mainly on farmers and tribal communities in India - as to how they have been affected by the modernisation process, especially since the adoption of neoliberal economic reforms. For a rural community the displacement is a traumatic both in terms livelihoods and from a cultural perspective. The paper analyses the issues of displacement of the villages that have been relatively isolated from the outside world. Modernisation-induced displacement becomes important due to its impact on the rural communities through land alienation which has resulted in protests by the affected communities. I find there is a gap in the literature regarding the impact of development projects on the socio-economic conditions of the rural communities.Keywords. India, Rural community, Modernisation, Land-displacement, Resettlement and sustainability.JEL. Q00, Q10, Q58
Is there a long-run association between globalization and productivity: The case of Turkey
Get PDFAbstract. This study examines short and long-run association between globalization and productivity by using a time series sample of Turkey covering the years from 1970 to 2014. Firstly, I check the stationarity status of the series and following that I conduct a cointegration analysis among series in the framework of ARDL boundary test technique. After that, both short-run and long-run coefficients are gathered by using error corrected form of ARDL Model. In addition to that, I provide the results for diagnostic check of the model. Eventually, a causality test is applied to see if there is a causal relationship between the series. According to the findings, globalization and productivity series are cointegrated and it is found that there is a long-run significant positive impact of globalization on productivity while this figure is negative for short-run. Moreover the test results for causality test imply that there exists just one unidirectional causality running from globalization to productivity.Keywords. Globalization, Productivity, Co-integration, Stationarity, ARDL Model.JEL. C32, F61, O47
The relationship between Bitcoin, gold and foreign exchange returns: The case of Turkey
Get PDFAbstract. This study focuses on the dollar, euro, gold, bitcoin and the impact of bubbles in financial investment instruments on bitcoin returns in the context of Turkey. The causal relationships (using the Toda-Yamamato causality test) between the returns of these financial instruments were also determined. In performing this assessment, the sup augmented Dickey-Fuller (SADF) and generalised SADF (GSADF) tests were employed to determine the existence of bubbles based on the period from 1 August 2018 to 23 March 2018. The volatility of bitcoin was tested by autoregressive conditional variant models. As aresult, it was shown that the observed bubbles in gold’s, the euro’s and the dollar’s returns reduced the volatility of bitcoin’s returns. Then, it was shown that the dollar’s, the euro’s and gold’s returns affected bitcoin’s returns.Keywords. Speculative bubbles, Bitcoin, Investment instruments, Autoregressive conditional heteroskedasticity models, Toda-Yamamato causality.JEL. G10, C58, E44
Letter to the Editor: Rejoinder
Get PDFTurkish Economic Review Volume 5, June 2018 issue 2, contains a letter to the editor from Steve H. Hanke professor at John Hopkins University “on Turkey’s Precarious Economic Situation”, which is imposed on the country by the hegemonic approach of US to international relations with developing economies like Turkey using the trade weapon as President Erdogan puts it. The letter of Hanke carries arrogance, lacks urbanity, and contains much economic nonsense, to put it mildly. Surprisingly, the narration soon assumes a question-answer format as if it were an interview! Let me tear across his main points
Lumping together democracy and dictatorship: Has macro dynamics of poverty remained steady in Pakistan
Get PDFAbstract. In this study we check the relationship between macroeconomics variables with poverty. We select head count ratio proxy of poverty as dependent variable and GDP, unemployment rate, literacy rate, rural population and worker remittances as independent variables. For the analysis of the data we take time series data from 1978-2011 and established the long run and short run relationship between dependent and independent variables. First of all we check the normality of the data by descriptive statistics, further we check the stationarity of the data by applying ADF test. For long run relationship between dependent and independent variables we applied FMOLS techniques and relationship in short run checked by EMC methods. Results of the data shows, macroeconomic variables especially literacy rate and rural population have been major factors that affect poverty levels in Pakistan. GDP has a negative and insignificant impact on poverty. Literacy rate is positivly and significantly related with poverty. Worker remittances have negative and significant impact on poverty, while rural population has negative and significant impact on poverty. Unemployment has positive and insignificant impact on poverty in Pakistan.Keywords. Poverty, Macro economy, Capability.JEL. E20, E22, E29
Francois Gipouloux, The Asian Mediterranean: Port Cities and Trading Networks in China, Japan and Southeast Asia, 13th - 21st Century
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The Effectiveness Analysis of Public Education and Health Expenditures
No full textAbstract. This study examines the links between public education and health expenditures, and education and health outcomes- measured by the school life expactancy and rate of child (under five) mortality, life expactancy at birth. It also investigates the role of governance on the effectiveness of public education and health expenditures. The effectiveness of public education and health expenditures is examined within education and health production function by using 2002- 2012 data. Empirical results show that effects of socioeconomic and environmental factors and demographic structure on education and health outcomes are similar to those in previous studies. The results indicate two important findings. First, public education and health expenditures remain incapable to explain outcomes when compared to other socioeconomic variables. Second, increase in public education and health expenditures is associated with improved outcomes just in countries where regulatory quality and control of corruption is high. With a general expression, public education and health expenditures become more effective in countries with high governance level.Keywords. Public education expenditures, Public health expenditures, Child mortality rate, Life expactancy at birth, School life expactancy.JEL. I18, I28, H51, H52