This study aims to evaluate the developments in Turkish monetary policy after 2002 and understand the constraints on the effectiveness of the Central Bank of the Republic of Turkey (CBRT). The CBRT has significantly altered its monetary policy in response to the crisis. It became much more experimental and aware of challenges it faced. However, the Bank’s ability to exert influence on key variables seems to have been restrained by factors outside of its control. Financial flows exert great influence on key macroeconomic variables that the Bank monitors closely. Furthermore, energy prices are among the key determinants of inflation in Turkey. As a result, the Bank’s influence on growth and inflation through intermediate variables became a daunting task. The magnitude and direction of flows seem to be mainly related to global risk perception determining the worldwide liquidity conditions rather than to domestic factors. Under these conditions central banks may not set their official interest rates independent of interest rates in advanced countries. Indeed, our VAR analysis exercise supports this argument for the Turkish case. Existing policy framework would not produce desired outcomes unless the sources of the problems such as financial flows as the main global constraints on monetary policy are addressed in a much more serious manner.

This paper aims to provide information on intergenerational educational mobility in Turkey over the last century (at least over the last 65 years). This is the first study explicitly on providing the association between parents’ and children’s education in Turkey over time unlike the previous studies of one point in time. Given the absence of longitudinal data, we make use of a unique data set on educational outcomes based on children recall of parental education. The data used is the result of Adult Education Survey of 2007. Several findings emerge from the analysis. First of all, children’s and parents’ educational outcomes are correlated. The intergenerational educational coefficient of the mothers is somewhat larger than that of the fathers. The intergenerational educational coefficients of both the mothers and the fathers decrease over the cohorts implying that intergenerational educational mobility increased significantly for the younger generations of children in Turkey. The chances of attaining a university degree for the children increases as fathers’ completed schooling level increases. Men’s chances of attaining high school or university education are substantially higher than that of women’s. The association between parent and child education is stronger when parent educational background is poor. The results imply that the policy makes should focus on children with poor parental educational background and on women.

Since Dixit (1984), it is well accepted that a home country's best policy is to ban imports in an oligopolistic market if the resulting monopoly has a cost advantage over imports. This note (i) provides a formal proof and (ii) extends this result to symmetric firms. When domestic instruments are available, the optimal policy in a non-cooperative game is to subsidize local production such that it completely replaces imports. This policy is also globally first-best.

This paper investigates the impacts of sovereign credit ratings and global financial conditions on the evolution of EMBI spreads for a panel of 23 developing countries by using daily data for the period between 1998 and 2012. To this end, we employ not only the conventional panel estimation procedures, but also the recent methods tackling with either cross-sectional dependence stemming from common global shocks or a potential endogeneity. Our results suggest that credit ratings along with global financial conditions are the main determinants of EMBI. The determinants of EMBI are not invariant to speculative and investment grading episodes and transitions between them. The recent global crisis changed the determinants of EMBI and led to credit ratings impact to converge between speculative and investment grading episodes.

Benefiting from an event analysis, we investigate the transmission mechanism through which the recent global crisis impacted the 15 worst affected countries and the reasons behind the weak performances of these countries. The overall evidence shows that the trade channel was the most important mechanism in the transmission of the crisis from advanced economies to developing countries. The role of the financial channel varied in different countries. Some countries encountered massive financial reversals; some others experienced different degrees of financial stops. In general, as expected, the most affected countries in our set are the ones that experienced both financial reversals and a dramatic decline in their exports. Although almost all these countries experienced spectacular growth performances from 2002 to 2008, they also accumulated significant vulnerabilities, which were mainly related to the structural problems of their integration into the world economy during the same time period. Furthermore, those countries that were unwilling or unable to conduct considerable countercyclical fiscal and monetary policies were among the most affected ones in our sample.

This paper considers the private sector wage earners in Egypt and examine their wage distribution during 1998-2012 using Egyptian Labor Market Panel Survey. We first estimate Mincer wage equations both at the mean and at different quantiles of the wage distribution taking into account observable characteristics. Then we make use of the panel feature of the data and estimate models taking into account unobservable characteristics. We also consider the possibility of nonlinearity in covariate effects and estimate a variant of matching models. In all cases we find a persistent informal wage penalty in the face of extensive sensitivity checks. It is smaller when unobserved heterogeneity is taken into account and larger at the top than at the bottom of the conditional wage distribution. We also examine the informal wage penalty over time during the study period and in different groups according to experience and education. The informal wage penalty has increased recently over time and is larger for the better educated but smaller for the more experienced.

This study examines the impact of firm resources on ICT adoption by the Turkish business enterprises using firm level data. ICT adoption is measured at three levels: The first level is technology ownership. The second level is the presence of enterprise resource planning (ERP) and customer resource management (CRM), and the third level is the use of narrowband and broadband technologies. The effects of the three main features of each technology level, which are complementarity, specificity, and the complexity, are analyzed by using firm level data in Turkey. This study has three main conclusions. As for the complementarity, firm’s resources play an important role in the adoption of technology while advancing from single technology to the multiple ones. Further, in the use of specific technologies such as ERP and CRM, firm resources generate differential effects between those technologies. Finally, the use of simple technologies does not require the same amount of firm resources as complex technologies.

This chapter analyzes the effect of intangible investment on firm efficiency with an emphasis on its software component. Stochastic production frontier approach is used to simultaneously estimate the production function and the determinants of technical efficiency in the software intensive manufacturing firms in Turkey for the period 2003-2007. Firms are classified based on the technology group. High technology and low technology firms are estimated separately in order to reveal differentials in their firm efficiency. The results show that the effect of software investment on firm efficiency is larger in high technology firms which operate in areas such as chemicals, electricity, and machinery as compared to that of the low technology firms which operate in areas such as textiles, food, paper, and unclassified manufacturing. Further, among the high technology firms, the effect of the software investment is smaller than the effect of research and development personnel expenditure. This result shows that the presence of R&D personnel is more important than the software investment for software intensive manufacturing firms in Turkey.

Antalya and Mugla provinces located in southwestern Turkey have emerged as new magnets for internal migration in the country. Socio-economic, demographic and labor market characteristics of immigrants coming to these two provinces from various regions are studied to uncover the reasons fueling their moves. This is accomplished through an analysis of descriptive statistics, and an analysis of a gravity model estimated. Differences and similarities between immigrants coming to these two provinces and those going to other migrant magnets, between immigrants and natives in Antalya and Mugla, and among immigrants coming to the two provinces from various origins are noted. What distinguishes Antalya and Mugla from other migrant-drawing provinces is that they attract some retirees and university students as well and their immigrants participating in the labor force are attracted mainly by jobs created in the sectors related to tourism, either directly or indirectly, rather than industry. Immigrants from different origins exhibit different characteristics and tend to specialize in different types of jobs. However, as other migrant flows, those directed at Antalya and Mugla are affected by distance adversely and by unemployment differential, past migration and population size at origin, favorably.

Bu calismada hem betimsel istatistiklerden hem de basit bir performans endeksinden faydalanilarak Turkiye’nin iktisadi performansi benzer ulke gruplari ve ulkelere gore incelenmektedir. Calismamiz siyasi ve iktisadi olarak bir donum noktasi olarak kabul edilebilecek 2002 yili ile 2014 yillari (verilerin el verdigi olcude) arasini kapsamaktadir. Calismanin temel bugulari sunlardir: Birincisi, Turkiye ekonomisininin goreli performansi tum donem ve alt donemlerde bir ya da iki degisken disinda ya ortalamanin altinda ya da ortalamaya yakindir. Bu bakimdan orneklemdeki ulkelerle karsilastirildiginda Turkiye icin istisnai bir basaridan soz etmek mumkun degildir. Ikincil olarak, kirilganlik gostergeleri olarak yorumlanabilecek gostergelere odaklanildiginda Turkiye en kirilgan ulkelerin basinda gelmektedir. Ozellikle rezerv yeterliligi, dis borc ve kompozisyonu, cari acik ve bunla ilgili olarak da sermaye hareketlerinin boyutu ve kompozisyonu diger gelismekte olan ulkelere gore epey kotu durumdadir. Makroekonomik endeks ile yaptigimiz analiz betimsel istatistikleri desteklemektedir. Hatta endeksleme analizi hem Turkiye’nin goreli performansinin tum donem boyunca en kotuler arasinda olduguna, hem de performansinin son donemde daha da kotulestigine isaret etmektedir. Politika yapicilarin ve ilgili kurumlarin var olan durumun gercekci bir analizi ile bir an once ortaya cikan tabloya gore adimlar atmasi gerekmektedir. Aksi takdirde kuresel devinimlere bagli olarak 1980 sonrasinda Turkiye’de ve diger bir cok gelismekte olan ulkede cokca gordugumuz sureclerin tekrarini yakin zamanda izlemek zorunda kalabiliriz.

This study investigates inequality of opportunity in educational achievements in Turkey over time. For this purpose we use test scores of PISA in mathematics, science and reading achievement of 15-year-olds over the period 2003-2012. Since the different waves of the samples cover only a fraction of the cohorts of 15-year olds we take into account the inequality of opportunity in access to the PISA test as well as the inequality of opportunity of the academic achievement in the PISA test. This procedure enables proper over time comparisons. We estimate the effect of circumstances children are born into on their academic achievement as evidenced in their PISA test scores. The main findings are as follows. First, confirming the previous studies we find that inequality of opportunity is a large part of the inequality of educational achievement in Turkey. Second, the inequality of opportunity in educational achievement shows a slightly decreasing trend over time in Turkey. Third, the inequality of opportunity figures based on the mathematics, science and reading achievements exhibited the similar trend over time. Forth, the family background variables are the most important determinants of the inequality in educational achievement which is a consistent pattern over time. However, there is also evidence of slight weakening of these factors over time. Policies are necessary to improve equality of opportunity in education in Turkey.

This paper investigates the relationship between labor force participation rate and unemployment rate in Turkey a developing country. Cointegration analysis is carried out for the aggregate and gender and age specific series. The findings indicate that there is no long-run relationship between labor force participation and unemployment rates in Turkey. Thus, unlike in the case of the developed countries the unemployment invariance hypothesis is supported in Turkey.

Informality is a salient feature of labor market in Egypt as it is the case with many developing countries. This is the first study of the determinants of worker transitions between various labor market states using panel data from Egypt. We first provide a diagnosis of dynamic worker flows across different labor market states. We develop transition probabilities by gender across different labor market states utilizing Markov transition processes. Next we identify the effects of individual, household, job characteristics and location on different mobility patterns by estimating a multinomial logit regression. The results point to the highly static nature of the Egyptian labor market. Government employment and the out of labor force are the most persistent labor market states. Further, only a few of the explanatory variables except high levels of education are found to have predictive power in explaining the transitions from formal wage, informal wage, self-employment, unemployment government employment and out of labor market states.