Working Papers

Inflation targeting (IT) is a widely used monetary policy. We examine the effects of it on emerging and developing countries’ inflation, output growth, dollarization, real effective exchange rate (REER), REER volatility, fiscal balance, output volatility and inflation volatility via propensity score matching. Propensity score matching is based on matching IT adopters and non-IT adopters on their propensity scores. The mean difference of the outcomes between these two is the average treatment effect (ATT). The main aim of it is to solve the self-selection problem. Propensity scores indicate the likelihood of adaptation of IT and these can be estimated via a probit model. In our main analysis, there is evidence of a decrease in inflation after the introduction of IT. Note that there is a decrease in GDP growth. Moreover, there is a decrease in REER suggesting there is a depreciation. The increase in fiscal balance implies the government becomes more efficient in tax collection to compensate the loss of the seignorage income. There is also an increase in GDP per capita volatility and GDP volatility. Our results are robust to different probit model specifications. By moving beyond inflation outcomes alone, this study provides new empirical evidence on the broader macroeconomic trade-offs associated with IT adoption in emerging and developing countries. The findings highlight that IT must be supported by institutional and structural reforms to achieve stable growth in these economies.

In December 2017, the government of Türkiye announced a comprehensive ban on the procurement of outsourced services by public institutions and mandated that all workers providing such services on-site be transitioned into permanent public positions within six months. We study the labor-market consequences of this abrupt and large-scale policy change using an administrative, linked employer–employee dataset. We find that workers who transitioned into public employment experienced higher wages and improved job security. At the firm level, private service providers with greater exposure to the reform faced higher exit rates and, if they survived, declines in employment, productivity, and profitability. In contrast, municipal-owned enterprises that internalized service provision became more productive and profitable. We also document modest positive wage spillovers in local labor markets. Overall, our results suggest that the outsourcing ban reallocated rents away from private service providers toward workers and public employers.

This paper investigates the relationship between workforce age composition, prior experience, and firm survival using matched employer–employee data from Turkey spanning 2007 to 2023. Using the universe of Turkish firms from the Entrepreneur Information System (EIS), we estimate discrete-time hazard models on manufacturing corporations and document three main findings. First, the relationship between average employee age and exit risk is non-linear but not smoothly quadratic: exit hazards are significantly elevated only for firms with very young (15–20) or older (45+) workforces, while the 25–40 age range shows no meaningful differences. This challenges the standard inverted-U specification commonly adopted in the literature. Second, this age effect is entirely confined to micro-firms (1–10 employees); for larger firms, capital intensity, export status, and supply-chain linkages dominate survival prospects. Third, prior employment experience of the workforce—measured through sector-specific experience, former employer characteristics, and employment network concentration—significantly predicts survival, especially for smaller firms. The influence of both age and experience variables fades as firms age, consistent with the gradual replacement of entry conditions by accumulated organizational capital. Our results highlight the size-dependent nature of human capital’s role in firm survival and carry implications for policies aimed at supporting new-firm longevity in developing economies.

The Turkish economy is sensitive to geopolitical developments due to its geographic location and proximity to the Middle East and North Africa, where tensions are generally high. One of the most recent events is the civil war in the neighboring Syria, which began in early 2011. This war had a significant impact on the Turkish economy. In addition to the massive influx of Syrian refugees, the war had economic repercussions because it led to a political crisis with Russia. Russia and Türkiye were involved in the Syrian civil war, supporting rival parties and Türkiye shot down a Russian warplane on November 24, 2015. In response, Russia announced a package of economic sanctions including some restrictions on bilateral tourism activities. As an important trading partner of Türkiye, these sanctions had profound impact on the Turkish economy, particularly on the tourism sector. We use a rich set of establishment-level micro data and a difference-in-differences framework to examine the impact of the Russian sanctions on employment and wages. Our results show that establishments located in provinces preferred more by Russian tourists experienced a sharp decline in employment (measured by the number of days worked) and total wage payments, while the decline in the average wage rate of these establishments was limited.

This study examines the impact of domestic outsourcing on the wages of workers performing outsourced tasks in Türkiye, using an administrative employee-employer linked dataset. Outsourcing events are identified by tracking worker flows across firms with specific properties. Unlike existing studies, our dataset incorporates buyer-supplier transactions, enabling us to confirm that a relationship between the predecessor and successor firm begins following the outsourcing event. This improves our ability to identify outsourcing events, which we use to explore wage effects of both high-skilled and low-skilled outsourcing. Our findings indicate that low-skilled workers experience wage losses from domestic outsourcing, while high-skilled, professional workers benefit, suggesting that domestic outsourcing may be one of the factors contributing to rising wage inequality.

In November 2015, Turkey's unexpected downing of a Russian military jet in Syria prompted Russia to impose a swift and comprehensive embargo on specific Turkish exports. This study leverages this quasi-natural experiment to estimate both the immediate and longer-term effects of the imposition and subsequent lifting of these sanctions. Utilizing administrative data encompassing all Turkish exporters, we first examine the impact on trade at the firm level, assessing the direct effects of the embargo, the redirection of trade to alternative markets, and the circumvention through other products. Second, we investigate broader repercussions on domestic operations, including firms' sales, procurement, and employment. Our findings show that while the embargo caused immediate and substantial declines in exports of affected products to Russia, firms partially mitigated these losses through trade diversion. Although relative trade patterns normalized post-sanctions, absolute trade values remained subdued. The analysis reveals that affected firms experienced declines in domestic sales and supplier relationships, with temporary disruptions in employment. However, most negative effects dissipated following the embargo's removal, except for some persistent reductions in procurement and supplier links. These results contribute to the understanding of sanctions' broader economic implications and the resilience of firms facing trade disruption.

Bu çalışmada, Türkiye ekonomisinin geçmişi devlet-piyasa ekseninde ve Cumhuriyet’in ilk yüzyılını kapsayan uzun bir dönemde incelendikten sonra, 2020’lerin ikinci yarısında geliştirilip 2030’larda uygulanabilecek ve yeni bir ‘siyasal-iktisat tarzı’ olarak da anlaşılabilecek bir proaktif popülizm gündemi önerilmektedir. Böyle bir gündem ülke tarihinin herhangi bir evresinde daha önce benimsenip uygulanmadığı için söz konusu önerinin ana çerçevesi de çalışmada ortaya konmaktadır. Bu çerçevede, uzun dönemli ekonomik büyüme olanaklarının geniş toplum kesimlerinin lehine yeniden düzenlenmesi öngörülmekte, dışa bağımlı gelişme ‘doğal’ değil ‘sorunsal’ bir olgu olarak saptanmakta ve gerek ‘makroekonomik temkin’ gerekse ‘kurumsal gelişme’ meselelerinin önemsenmesi gerektiği vurgulanmaktadır. Proaktif popülizmin Türkiye için orijinal bir gündem önerisi ve yeni bir siyasal-iktisat tarzı olarak oluşturulmasında üç başat siyasal-iktisadi katkıdan yararlanılmaktadır: (i) Ziya Öniş ve Fikret Şenses’in ‘proaktif devlet-reaktif devlet’ ayrımı, (ii) Korkut Boratav’ın ‘popülizm’ olgusuna sınıfsal bakış açısı ve (iii) Dani Rodrik’in ‘makroekonomik istikrar’, ‘ekonomik küreselleşme’ ve ‘popülizm’ arasındaki ilişkileri ele almaya yönelik yaklaşımı. Popülizmin ‘klasik’ varyantları ile proaktif popülizm arasındaki temel fark, ikincisinin ‘makroekonomik temkin’ ve ‘kurumsal gelişme’ meselelerini göz ardı etmeyerek bunları sistemik ve sınıfsal olgular olarak değerlendirmesidir. Dolayısıyla bu çalışma, karma ekonomi ile neoliberalizmi ‘yarıştırmanın’ ötesine geçmek üzere, 21. Yüzyılda da ‘az gelişmişlik’ sorunlarıyla yüzleşmeyi sürdüren Türkiye’de yakın gelecekte etkinleştirilebilecek bu yeni siyasal-iktisat tarzını tartışmaya açmayı amaçlamaktadır.

Bu çalışmada, Türkiye’nin uzun dönemli ekonomik büyüme performansı ‘Maddison Projesi Veri Tabanı’nın (Maddison Project Database) 2020 sürümü kullanılarak ülke karşılaştırmalı ve ‘betimlemeli’ (descriptive) bir çerçevede çözümlenmektedir. Örneklem, 1923-2018 dönemini ve Türkiye dâhil 60 ülkeyi kapsamaktadır. Karşılaştırmalı büyüme performansları, hem ülke ekonomilerinin reel büyüklüğünde, hem de kişi başına düşen reel gelirde gözlemlenen değişimler hesaba katılarak incelenmektedir. Bunun için Büyüme İktisadı’nda yaygın olarak kullanılan matematiksel araç ve yöntemlerden yararlanılmaktadır. Çalışmada yaklaşık yüz yıllık tüm dönemin yanı sıra, iktisadi ölçütlere göre belirlenen 13 alt döneme de odaklanılmaktadır. Ayrıca, örneklemin zaman boyutu 1923-1979 ve 1980-2018 olmak üzere iki uzun evreye bölünerek Türkiye’nin ‘karma ekonomi’ ve ‘neoliberalizm’ rejimleri altındaki ‘göreli’ büyüme performansı da irdelenmektedir. Ülke karşılaştırmalı çerçeve açısından ise, Türkiye’nin büyüme performansı ‘yüksek gelirli’ ve ‘düşük ve orta gelirli’ ülke gruplarıyla birlikte ele alınmaktadır. Bunun yanı sıra Latin Amerika, Doğu Asya ve Doğu Avrupa bölgelerinden seçilmiş bazı ülkeler ile G-7 ülkeleriyle de karşılaştırmalar yapılmaktadır. Temel bulgulara göre, Türkiye’nin uzun dönemli ve ‘göreli’ büyüme performansı fena değildir, ama büyük bir takdiri de gerektirmemektedir. Nitekim, ‘akran’ ülkelerle karşılaştırıldığında tarihsel olarak genellikle daha iyi bir büyüme performansı gösteren Türkiye’nin yakın geçmişte (2000’li ve 2010’lu yıllarda) bu ülkelere karşı ‘pozitif’ göreli eğilimini kaybetmeye başladığı saptanmaktadır. ‘Akran’ ülkelere karşı ‘karma ekonomi’ evrelerinde böyle bir sorun gözlemlenmemişken göreli büyüme performansında düşüş sinyallerinin yakın tarihli ‘neoliberal’ evrelerde ortaya çıkması, son birkaç on yıldır Türkiye ekonomisinin uluslararası iş bölümüne eklemlenme tarzında göz ardı edilmemesi gereken sorunların bulunduğuna işaret ediyor olabilir.

In this study, we aim to estimate the labor markups along with the evolution of labor and profit shares in the manufacturing industry of Turkiye over 2007-2021 via an administrative firm-level dataset, Entrepreneurship Information System (EIS), covering the universe of firms and containing detailed balance sheet information. We employ the recently popularized technique, the production function approach developed by De Loecker and Warzynski (2012), to estimate markups. Until 2016, there is a general decline in the level of markups. Concurrently, the gross profit rate slightly increases, and labor share in value added remains relatively stable. However, since 2016, which corresponds to the era of high inflation, there has been a notable surge in gross profit rates alongside a significant decrease in the labor share. The primary catalyst for these post-2016 shifts is attributed to firms positioned in the upper percentiles of the markup distribution, which successfully increased their markups and their share in total value-added during this period. As such, it may be fruitful for the competition policy to delve deeper into the root causes of the post-2016 surge in the markups of the high markup firms as well as the changing market composition.

The small and medium-sized enterprises might play an essential role in the economy of a developing country. Yet, in developing countries, relatively fewer firms have been able to transition from micro enterprises focusing on survival to small and medium enterprises with higher capacity for innovation and job creation. This problem of the ‘missing middle’ has been identified as one of the barriers to increasing economic prosperity and therefore the ‘reasons’ underlying it have been examined in studies on various parts of the developing world. This study examines the ‘missing middle’ problem from a historical-institutional perspective by focusing on the underutilization of a novel form of business organization, i.e., PLLC in Turkey. Based upon a novel dataset of firm creation and desk research on legal changes in Turkey during 1957-1994, the study demonstrates the ‘missing’ PLLCs and discuss the potential factors underlying legal stagnation.

The topic of early childhood development (ECD) and investment in ECD has come to the forefront recently, especially in the case of developing countries, and it is among the 2030 SDGs of the UN. Until recently, human capital has been associated with years of schooling. However, the latest studies show that brain development is fastest in the ECD period, which starts in the prenatal period and ends before formal schooling. Experiences during this period and even maternal health before pregnancy have persistent effects on an individual’s human capital. Investing in human capital during the ECD period is more effective than investing later in life. In this paper, we develop a 9-period overlapping generations model examining the impact of parental human capital investment on economic growth. Using a multiperiod human capital formation technology with parental human capital and monetary input, we investigate the effects of alternative policies targeting the ECD period to reach the highest economic growth rate. We calibrate our model to 2019 Turkish data and find that mandatory and matching funds are more effective than lump-sum subsidies, which increase household income and leave the investment

In this paper we investigate the relationship between mother’s education level and the development of young children in Turkey using representative microdata from the 2018 Turkey Demographic and Health Survey (TDHS). The data include detailed information about the developmental status of young children of 36-to-59 months old. We find that only when the mother has at least a high school level education, there is a positive impact on the child’s developmental status as summarized the Early Childhood Development (ECD) index, which is an index constructed based on the child’s four developmental domains. We also show that the household’s wealth is also positively associated with the child’s developmental status, particularly in the socio-emotional and the learning readiness domains.

Bu çalışmada, Türkiye’de iktisat bölümlerinde, doktoralı akademisyenlerin, ne oranda aynı kurumdan akademik derecelerini ve unvanlarını aldıkları konu edilmektedir. Akademik Kendileşme olarak adlandırılan bu olgu, çalışmada değişik ölçütler kullanılarak 136 iktisat bölümü ve bu kurumlarda istihdam edilen1.354 doktoralı akademisyen üzerinden incelenmiştir. En genel haliyle kendileşme, aynı bölümden doktora almış elemanların, o bölümdeki toplam doktoralı öğretim elemanı sayısına bölümüdür. Türkiye ortalaması ise doktora aldığı bölümde istihdam edilen akademisyen sayısının bölümdeki toplam doktoralı akademisyen sayısına oranıdır. Türkiye’de iktisat bölümlerinde, çalıştığı bölümden doktora almış öğretim üyesi sayısı 405’tir. Bütün bölümler düşünülürse kendileşme oranı %30, doktora veren bölümler düşünülürse %43, en az bir doktora mezununu istihdam eden bölümler düşünülürse %49 olmaktadır. Doktorası aynı kurumdan olan akademisyenlerin oranı Çukurova, Atatürk ve Afyon Kocatepe üniversitelerinde %90-%100 arasında, Selçuk, İstanbul, Marmara, Anadolu ve Erciyes üniversitelerinde %80’nin üzerindedir. Çalışmada, geleneksel kendileşme ölçütü olarak kullanılan kendinden doktoralı oranı yanı sıra, çalışılan kurumdan alınan doktora öncesi dereceleri de hesaba katan Güçlü Kendileşme ve ek olarak aynı kurumdan alınan akademik unvanları da hesaba katan Çok Güçlü Kendileşme endeksleri ve bunların varyantları da geliştirilmiştir. Çukurova, Afyon Kocatepe, Atatürk, Selçuk, Erciyes, Marmara ve İstanbul üniversitelerindeki iktisat bölümleri, kendileşme sıralamalarının tamamında veya kendileşme ölçütlerinin çoğunda üst sıralarda yer almaktadır. Pamukkale, İstanbul Medeniyet, Bilecik Şeyh Edebali, Akdeniz, Bandırma Onyedi Eylül, Trakya ve Ortadoğu Teknik Üniversitesi iktisat bölümleri ise kendileşmenin görece düşük olduğu bölümlerdir. Çalışmada, geliştirilen ve hesaplanan kendileşme ölçütlerinin kendi aralarındaki ilişkiler ile etkiledikleri/etkilendikleri değişkenler arasındaki ilişkilere de yer verilmiştir.

Adopting agrophotovoltaic (AgroPV) systems involves many challenges, not only technical issues but also social and institutional challenges underlying insufficient social acceptance and institutional support. Using semi-structured interviews with the pioneer farmers, we explore the social and institutional challenges that may arise in implementing AgroPV systems in a developing country context—Turkiye—where there is currently no legislation on AgroPV. Still, the synergistic impact of AgroPV is highly probably due to climatic conditions in the Mediterranean setting. The pioneer farmers exhibit a highly positive attitude towards AgroPV systems reflecting that they recognize and highly value this synergistic potential. In particular, they are perceptive about how they may use AgroPV techniques to solve local problems, including those exacerbated by input dependency and climate change, beyond an abstract (economic or financial) opportunity dimension. In other words, there is a strong motivational drive for AgroPV given the challenges in Turkish agriculture; however, the weak institutional setting may channel farmers away from its adoption. Our interviews reveal that the institutional setting undermines predictability, which is vital in farmers’ willingness and ability to participate in long-term, capital-intensive projects such as Agrivoltaics. Bureaucracy’s distrust of potential investors, probably caused by low procedural capacity, seems to have bred a negative official attitude towards ‘dual-use’ innovations. This problem, in return, explains farmers’ negative experiences, such as red tape in receiving licenses and permits, contributing to their doubts about sustained government support. Understanding this institutional setting is crucial for overcoming the bias towards developed countries in the literature and providing a more informed perspective before further legislative changes.

Employees’ wellbeing is important to the firms. Analysis of job satisfaction may give insight into various aspect of labor market behavior, such as worker productivity, absenteeism and job turn over. Little empirical work has been done on the relationship between structure of working environment and job satisfaction. This paper investigates the relationship between working environment, firm size and worker job satisfaction. We use a unique data of 28,240 British employees, Workplace Employee Relations Survey. In this data set the employee questionnaire is matched with the employer questionnaire. Four measures of job satisfaction considered are satisfaction with influence over job, satisfaction with amount of pay, satisfaction with sense of achievement and satisfaction with respect from supervisors. They are all negatively related to the firm size implying lower levels of job satisfaction in larger firms. The firm size in return is negatively related to the degree of flexibility in the working environment. The small firms have more flexible work environments. This is the first study that explore the effect of work amenities. We further find that, contrary to the previous results lower levels of job satisfaction in larger firms can not necessarily be attributed to the inflexibility in their structure of working environment.

The American Board of Commissioners for Foreign Missions (ABCFM) had a significant foothold in the Anatolian geography for the majority of the early 19th century, through their sizeable human capital intervention. Through an extensive archival work, we study the impact of human capital intervention on development outcomes. Using the spatial variation in the built and functional mission stations, we find areas closer to ABCFM missions have presently higher income by 5%-17%, and higher general development index by 0.07-0.12 standard deviation in 10 km proximity. We identify the mission impact by exploiting a placebo set from the group that was conceived but not carried out, and also an exogenous re-partition of the working region as an instrumental variable strategy. The underlying mechanisms are labor productivity in the agriculture sector, which allows for greater skill differentiation and structural transformation. Gender roles in education are also significantly transformed.

We examine the relationship between wealth and health through prominent growth indicators and cognitive ability. Cognitive ability is represented by nutritional status. In this study, the proxy variable for nutritional status is BMI since there is a strong relationship between cognitive ability and nutrition. We use the reduced form equation in the cubic specification of time preference rate to estimate this relationship. We assume that the time preference rate is one of the outputs of cognitive ability. The growth indicators utilized are GDP per capita, schooling, overall and manufacturing productivities, and savings. We estimate our models using the FE, GMM estimators, and long difference OLS and IV estimation through balanced panel data for 47 countries for the 1980-2009 period, which is a representative period of the neo-liberal and globalization economic policy implications. Furthermore, by using the 1980-2009 period, we may eliminate the ripple effects of the 2007-2009 financial crisis. Although there is ample evidence that the association between GDP per capita, overall and manufacturing productivities, and BMI could be cubic, we take the results of the long-difference quadratic specification into consideration and conclude that the relationship between all prominent growth indicators and BMI is inverse U-shaped. In other words, cognitive ability has a significant potential to progress growth and economic development only in a healthy status.

This study aims to investigate the efficient market hypothesis for a number of non-renewable resources over the period 1980Q1-2019Q4. We use two different stationarity tests, one is designed to capture smooth breaks, and the other one is designed to detect abrupt changes in the prices. With the use of the stationarity tests, we aim to overcome the low power issue of the commonly utilized unit root tests with stationary but persistent data. Moreover, given the inference of the existing studies for the importance of structural breaks in the analysis of stochastic properties of non-renewable natural resource prices, we utilize both smooth and instant breaks in our analysis to account for the fact that misspecification of the functional form of the breaks could be as problematic as ignoring the breaks. Our empirical results reveal significant evidence of trend stationarity in almost all prices with structural changes related to market-specific and global economic events, though concerns on economic uncertainties appeared to be effective, especially on precious metals. The only exception is silver, with stationarity being rejected for all specifications considered in the paper, suggesting that shocks to silver are mostly permanent in nature and it is characterized by the efficient market hypothesis.

This paper investigates the hypothesis of unemployment hysteresis for GIPS countries (Greece Ireland, Portugal, and Spain) over the period 1998(4)-2019(4). While most of the existing empirical studies assume constant order of integration for unemployment over the sample period, we consider the possibility that, like many macroeconomic variables, unemployment might display changes in persistence, which might result in potential switches between the natural rate and hysteresis hypotheses. In this respect, we adopt a multiple persistence change methodology. Our empirical results suggest that the structural natural rate (hysteresis) hypothesis is supported for Ireland (Portugal) over the entire sample without any change in persistence of the unemployment rate. For the cases of Greece and Spain, on the other hand, our results propose that unemployment is characterized by multiple changes in persistence with the observed dates for persistence changes coinciding with the Great Recession, the European Sovereign debt crisis, and the deepening of economic and labor market reforms launched to retrain the impact of the crises in those countries.

The electricity price forecasting (EPF) is a challenging task not only because of the uncommon characteristics of electricity but also because of the existence of many potential predictors with changing predictive abilities over time. Particularly, how to account for all available factors and extract as much information as possible is the key to the production of accurate forecasts. To address this long-standing issue in a way that balances complexity and forecasting accuracy while facilitating the traceability of the predictor selection procedure, the method of Bootstrap Aggregation (bagging), which is a variant shrinkage estimation approach for the estimation of large scale models, is proposed in this paper. To forecast day-ahead electricity prices in a multivariate context for six major power markets we construct a large scale pure-price model (in addition to some stochastic models that are commonly applied in the literature) and apply the bagging approach in comparison with the popular Least Absolute Shrinkage and Selection Operator (LASSO) estimation method. Our forecasting study reveals that with its superior forecasting performance and its computationally simple algorithm, the bagging emerges as a strong competitor to the commonly applied LASSO approach for the short-term EPF. Further analysis for the variable selection for the bagging and LASSO approaches suggests that the differentiation in the forecast performances of two approaches might be due to, inter alia, their structural differences in the explanatory variables selection process. Moreover, to account for the intraday hourly dependencies of day-ahead electricity prices, all our models are augmented with latent factors, and a substantial improvement is observed only in the forecasts from models covering a relatively limited number of predictors, while almost no improvement is obtained in the forecasts from the large scale model estimated through LASSO and bagging techniques.

This paper considers the female labor force participation (FLFP) behavior over the past decade in five MENA countries namely, Algeria, Egypt, Jordan, Palestine and Tunisia. Low FLFP rates in these countries, as it is in other MENA countries, are well documented. We conduct synthetic panel analysis using age-period-cohort (APC) methodology and decompose FLFP rates into age, period and cohort effects. We present our results with Hanoch-Honig/Deaton-Paxson normalization and maximum entropy estimation approaches to the APC methodology in order to observe robustness of our results. We first study the aggregate FLFP and note the differentials in age, period and cohort effects across the countries we consider.The analysis is carried also out by rural/urban regional differentiation, marital status and educational attainment. Implications of our results for possible government policies to increase FLFP rates are discussed.

We investigate patterns and globalisation-related causes of premature deindustrialisation (PD) using a large panel of advanced (AE), emerging (EME) and developing (DE) economies. We find that, PD tends to be the case for all EME and DE, except E. Asian countries. African countries appear to be hit worst by PD. Globalisation-related determinants of PD vary across country groups. Higher trade openness leads to deindustrialisation in DE. Trade openness, however, enhances dependent industrialisation in Latin American countries and the ‘factory economies’ of E. Asia, which have stronger linkages to global value chains. It is our contention that development possibilities can be expanded by aiming at higher technology activities and more intense forward-linkages to global value chains. Our findings suggest that such strategic industrial policies at the levels of EME and DE have the potential to generate growth convergence at international level. It is our contention that development possibilities can be expanded by aiming at more intense linkages to global value chains, but proactive industrial policies at the levels of EME and DE are required to achieve such expansion.

This paper estimates private and social returns to investment in education in Turkey, using the 2017 Household Labor Force Survey and alternative methodologies. The analysis uses the 1997 education reform of increasing compulsory education by three years as an instrument. This results in a private rate of return on the order of 16 percent for higher education and a social return of 10 percent. Using the number of children younger than age 15 in the household as an exclusion restriction, the analysis finds that returns to education for females are higher than those for males. Contrary to many findings in other countries, private returns to those working in the public sector are higher than those in the private sector, and private returns to those who followed the vocational track in secondary education are higher than those in the general academic track. The paper discusses the policy implications of the findings.

This paper investigates whether the impacts of the main push (global financial conditions, GFC) and pull (growth) factors on capital inflows are invariant to endogenously estimated threshold levels for structural domestic conditions (SDC) represented by governance/institutional quality, trade openness, de facto international financial integration and de jure financial openness in emerging market and developing economies. Our results strongly suggest that, for all the components of capital inflows, the impact of the domestic pull factor is substantially much higher for the episodes of better governance, higher trade and de jure financial openness and de facto international financial integration. The sensitivity of non-FDI and aggregate inflows to GFC is highly significant and tends to be considerably higher for countries with better SDC. FDI inflows are found to be basically determined by the domestic pull factor across all these regimes. The impact of GFC on FDI inflows appears not to considerably change across the SDC.

In this paper, we investigate the effect of the level of English skills on the labour market outcomes of Turkish women, using data from the Adult Education Survey of 2007. By adopting a bivariate equation framework, we jointly model the effect of English skills on labour market status and, conditional on being a wage earner, on monthly earnings and occupational status. The multinomial equation that explains labour market status allows for a different effect of language knowledge on the probability of being employed, unemployed but actively looking for a job, an unpaid family worker or involved in household tasks. The results indicate that being proficient in English is conditionally associated with a higher probability of being employed as a wage earner and, to a lesser extent, unemployed but looking for a job, whereas it decreases the likelihood of being involved in household tasks. Moreover, there is a significant conditional correlation between having a high level of skills in English and earnings, which is only modestly reduced when job-related variables and (especially) occupation dummies are included as additional controls. Indeed, being proficient in English barely affects occupational status when selection into employment status is controlled for. Therefore, the knowledge of foreign languages (in this case English) seems to stimulate labour market participation and earnings capacity, but does not substantially affect the occupational position of women in the Turkish labour market.

This study investigates whether the impacts of the main common push (global financial conditions, GFC) and country-specific pull (growth) factors on capital inflows are invariant to the prevailing exchange rate regimes (ERRs) in emerging market economies. Our results suggest that endogenously estimated ERR thresholds do matter especially for the impact of GFC. The impact of GFC is substantially high under more flexible ERRs for all capital inflow types except FDI. FDI inflows are basically determined by the pull factor across all ERRs. Portfolio inflows are mainly determined by GFC. The sensitivity of aggregate and other investment inflows to the pull factor seems to be much higher under more rigid ERRs. Our results are broadly in line with the literature suggesting that credible managed ERRs encourage capital inflows by allowing countries to import monetary policy credibility of the center country and to provide exchange rate guarantee.

Developing countries have encountered many economic crises since the 1980s, due mainly to structural problems related to their integration into the global economy. The Turkish economy is by no means an exception, and suffered significantly from the crises of 1994, 2001 and 2008-09. This paper investigates the tales of these three crises to shed light on the propagation mechanisms of crises and their implications for developing countries, given the Turkish experience. Our study is aiming at complementing existing studies by giving a very broad comparative picture of the main macroeconomic trends before and after the crises at the expense of ignoring many important details explained in other studies. This comparison can be also useful for understanding possible (and under current conditions highly unavoidable) implications of current developments in Turkish economy. Although there are many differences in the emergence of recent crises in Turkey, significant similarities can be found between the 1994 and 2001 crises. The crisis of 2008-09 can be considered exceptional in many aspects. The first two episodes were deemed to be mostly finance-led and finance-driven, with repercussions on the real sectors thereafter; but the 2008-09 crisis was a fully-fledged real sector crisis from the beginning, amid a direct collapse in employment and real economic productivity.

This study would like to contribute to the existing literature on the Feldstein-Horioka paradox by focusing on Turkey for the period 1960-2014 and by scrutinizing the correlation between domestic savings and investments within a time-varying parameter approach (which is warranted especially for emerging countries due to their political and economic instability and due to the frequency of policy changes). Our time-varying parameter approach is able to capture the impact of various economic and political interruptions on the correlation between domestic savings and investments, especially the military coups in the early 1960s, 1970s and 1980s, and the economic and financial crises in the mid-1990s, in the late 1990s, and in the early 2000s, as well as the financial crises affecting various countries in the globe in the late 1990s and 2000s. Our empirical analysis suggests a high correlation between domestic savings and investments in the 1960s, which was decreasing (increasing) during the 1970s (1980s), and which was decreasing since the 1990s. Furthermore, in the post-2002 era, with a further decline in the correlation coefficient, the saving-investment nexus has turned out to be statistically insignificant.

We investigate the long-run relations and equilibrium correction mechanisms between gross capital inflows, outflows and global financial conditions for advanced and emerging market economies. According to our results, the findings of the recent empirical literature, suggesting that twin behaviour of capital inflows and outflows resulting from domestic and foreign investors to behave as distant cousins tend to be the case for the long-run. The short-run relations, however, often appear to be consistent with the conventional theory suggesting that the behaviours of residents and non-residents do not systematically diverge from each other. Consistent with the flight to safety concerns, capital outflows from EME and capital inflows to AE tend to increase in the long-run in response to worsening global financial conditions. We find that, these results essentially hold also for the main components of capital flows.

Based on two strands of research, namely 'barriers to technology adoption' and 'appropriate technology', we propose a formal reappraisal of 'deep integration', a broad concept often used in trade policy discussions. We then evaluate the 2004-7 EU enlargement wave utilizing this operational reappraisal. More specifically, we first estimate, using 2007 data, total labor productivity (TLP) in the 27 EU member states, and show that in all but a few sectors, new member states clearly stand below the lower envelope technology frontier of the older members in their use of skilled and unskilled labor. We interpret this as being the result of past barriers to technology adoption that are likely to be removed by the integration process into the EU, with these new counties' TLP shifting to the incumbent members' lower envelope. We then explore the potential effects on all 27 EU member states of this 'deep integration' experiment using a calibrated intertemporal multisectoral general equilibrium model. Our main finding is that, for most parameter configurations, workers' welfare in incumbent member countries is not negatively impacted despite the rather drastic improvement in competitiveness experienced by new members.

This paper studies a sequential model of multilateral bargaining with a majority rule in which legislators can make decisions over both private and public good dimensions with endogenous recognition process. Legislators expend resources to be the proposer and make proposals about the allocation of private and public goods. We show that legislators can exert effort to be the proposer and make proposals in both dimensions depending on legislative preferences. Effort choices in equilibrium mainly depend on preferences over both distributional and ideological dimensions, as well as the patience level of legislators and the size of the legislature. We also show that in a diverse legislature, it may be possible to have distributive policies when the majority has collective desires or vice-versa.

This study aims to explore the empirical validity of the real interest rate parity (RIP)hypothesis for East Asian countries using Japan as the base country. To this end, we employ the recently proposed unit root tests of Christopoulos and Leon-Ledesma (2010) that account for both multiple smooth structural breaks of unknown form and nonlinear mean reversion in the series. Our empirical results uncover overwhelming evidences in favor of the RIP hypothesis for the whole countries in our sample. More specifically, through a Fourier approximation, it is observed that all real interest rate differentials display a mean reverting behavior around an infrequently smooth-breaking mean, with the breaks being in accordance with the financial reforms and economic crises witnessed by the countries. Moreover, the degree of mean reversion appears to vary nonlinearly with the size of real interest rate appreciations and depreciations.

In this study we investigate whether women’s education, labor market status and their status within thehousehold have any impact on their choice of a birth control method in Turkey. We use the 2013 round of Demographic Health Survey (DHS) dataset which includes information about women’s education levels and occupation types as well as other socioeconomic status indicators. The DHS also reports whether women use relatively more effective modern (i.e. IUD, pill, etc.) or traditional (i.e. withdrawal) methods. In the empirical analysis, we apply multivariate logistic estimation techniques and control for women’s other indicators of socioeconomic status such as age, ethnicity, and wealth. We find that woman’s education level and urban residence are the leading determinants that explain the choice of modern contraceptive methods. We also observe that women who are unemployed, inactive or unpaid family workers are less likely to use modern contraceptive methods compared to wage-earner women.

In this paper, we provide new theoretical insights about the role of collusion in organizational hierarchies by combining the standard principal-supervisor-agent frameworkwith a theory of social preferences. Extending Tirole’s (1986) model of hierarchy with the inclusion of Fehr and Schmidt’s (1999) distributional other-regarding preferences approach, the links between inequity aversion, collusive behavior throughout the levels of a hierarchy and the changes in optimal contracts are studied. It turns out that other-regarding preferences do change the collusive behavior among parties depending on the nature of both the agent’s and the supervisor’s other-regarding preferences. Most prominent impact is on the optimal effort levels. When the agent is inequity averse principal can exploit this fact to make agent exert higher effort level than she would otherwise. In order to satisfy the participation constraint of the supervisor, the effort level induced for the agent becomes lower when the supervisor is status seeker, and it is higher when the supervisor is inequity averse.

This study shows that when there is multinational competition for foreign acquisition, the strategic use of a consumer welfare argument in regulating foreign marketentry leads to a preemptive foreign acquisition. Even under fierce competition, foreign acquisition will emerge as part of a non-cooperative equilibrium (although multinationals would have gained more had they been able to credibly commit to a cooperative equilibrium of independent foreign sales, either via greenfield investment or trade under complete liberalization) which increases local welfare by more than both the case without foreign market entry and the case with foreign market entry via independent foreign sales.

This article explores the long-run relationship between unemployment rate and labor force participation rate for men and women in Canada. The co-integration analysis vindicates the existence of a long-run relationship between these two variables. This finding leads us to doubt the pertinence of the unemployment invariance hypothesis for Canada. This is consistent with the empirical studies for Japan, Sweden and the United States, but contradicts the empirical studies for Australia, Romania and Turkey. Further, we find discouraged worker effect for women and added worker effect for men and we elaborate on the possible explanations for this seemingly contradictory finding.

The strong relationship between various health indicators and education is widely documented. However, the studies that investigate the nature of causality between these variables became available only recently and provide evidence mostly from developed countries. We add to this literature by studying the causal effect of education on days hospitalized and days out of work for health reasons. We consider two educational reforms. One is the educational expansion of the early 1960s and the other is the 1997 increase in compulsory level of schooling from five to eight years. However, due to the possibility of weak instruments we do not further pursue this avenue. We focus on individuals in two cohorts namely, 1945-1965 which is an older cohort and 1980-1980 which is a younger cohort. We estimate Tobit models as well as Double Hurdle models. The results suggest that an increase in years of education causes to reduce the number of days hospitalized for both men and women unambiguously and the number of days out of work only for men while an increase in education increases the number of days out of work for a randomly selected women.

We empirically investigate the validity of the monetary policy trilemma postulation for emerging market (EME) and advanced (AE) economies under different exchange rate and monetary policy regimes before and after the recent global financial crisis (GFC). Consistent with the dilemma proposition, domestic interest rates are determined by global financial conditions and the FED rate even under floating exchange rate regimes (ERR) in the long-run. The impact of the FED rates is higher in EME than AE and EME are much more sensitive to global financial cycle under managed than floating ERR. The spillover from the FED rate substantially increases after the GFC in EME with floating ERR and AE. The results from the monetary policy reaction functions based on equilibrium correction mechanism specifications suggest that domestic interest rates respond to inflation and output gaps especially under inflation targeting (IT) in the short-run. The response to inflation gap tends to be smaller in IT AE after the GFC.

This paper empirically investigates whether emigrants from MENA countries self-select on cultural traits such as religiosity and gender-egalitarian attitudes.To do so, we use Gallup World Poll data on individual opinions and beliefs, migration aspirations,short-run migration plans, and preferred destination choices. We find that individuals who intend to emigrate to OECD, high-income countries exhibit significantly lower levels of religiosity than the rest of the population.They also share more gender-egalitarian views, although the effect only holds among the young (aged 15 to 30), among single women, and in countries with a Sunni minority. For countries mostly affected by Arab Spring, since 2011 the degree of cultural selection has decreased. Nevertheless,the aggregate effects of cultural selection should not be overestimated. Overall, self-selection along cultural traits has limited (albeit non negligible) effects on the average characteristics of the population left behind, and on the cultural distance between natives and immigrants in the OECD countries.

This paper discusses the role of reserve prices when the signal of each bidder is positively affiliated with the seller's signal. We distinguish three reserve price designs: a public reserve price, announced before the auction starts, a revealed reserve price, disclosed when a bid matches it, and a secret reserve price that is disclosed after the highest bid has been reached. We show that a public or a revealed reserve price are strategically equivalent, and we show that no seller will set a secret reserve price.

This study scrutinizes the implications of a vendor bid in an open ascending auction with a seller of an indivisible good and many potential buyers. The seller can set a reserve price, and both the seller and the bidders have private signals and interdependent values. We show that no strictly increasing reserve price function exists in the presence of a vendor bid. We also show that a vendor bid must be large enough to be credible, and thus vendor bids may not be used in equilibrium. The vendor will exercise her vendor bid option if and only if her private signal is large enough.

This paper estimates the impact of the extension of compulsory schooling from 5 to 8 years in Turkey—which increased women’s schooling by more than a year—on marriage and birth outcomes of teenage women. We employ a regression discontinuity design, where we compare month-year of birth cohorts of women. The increased compulsory schooling years reduce the probability of teenage marriage by age 16 and first-births by age 17 substantially. However, these effects dissapear after ages 17 and 18 for marriage and first-births, respectively. Our results indicate strong incarceration effects of the policy on marriage and birth outcomes during the newly mandated compulsory schooling years as well as human capital effects on the time to marriage. However, the human capital effects on the probability of being ever-married vanish after a couple of years the students become free to leave school.

In this paper we have examined the unemployment rate series in Turkey by using long memory models and in particular employing fractionally integrated techniques. Our results suggest that unemployment in Turkey is highly persistent, with orders of integration equal to or higher than 1 in most cases. This implies lack of mean reversion and permanence of the shocks. We found evidence in favor of mean reversion in the case of female unemployment and this happens for all the groups of non-agricultural, rural, urban and youth unemployment series. The possibility of non-linearities are observed only in the case of female unemployment and the degree of persistence is higher in the cases of female and youth unemployment series. Important policy implications emerge from our empirical results. Labor and macroeconomic policies will most likely have long lasting effects on the unemployment rates.

This paper analyzes the drivers of wage differences among college graduates who hold a degree in a different field of study. We focus on Turkey, an emerging country that is characterized by a sustained expansion of higher education. We estimate conditional wage gaps by field of study using OLS regressions. Average differentials are subsequently decomposed into the contribution of observable characteristics (endowment) and unobservable characteristics (returns). To shed light on distributional wage disparities by field of study, we provide estimates along the unconditional wage distribution by means of RIF-Regressions. Finally, we also decompose the contribution of explained and unexplained factors in accounting for wage gaps along the whole distribution. As such, this is the first work providing evidence on distributional wage differences by college major for a developing country. The results indicate the existence of important wage differences by field of study, which are partly accounted by differences in observable characteristics (especially occupation and, to a lesser extent, employment sector). These pay gaps are also heterogeneous over the unconditional distribution of wages, as is the share of wage differentials that can be attributed to differences in observable characteristics across workers with degrees in different fields of study.

In 1942, the Republic of Turkey promulgated a controversial tax on personal wealth to finance mobilization of the army and curb inflation. The extraordinary tax was arbitrarily assessed and the burden fell disproportionately on non-Muslim minorities. The precise transformative effect of the tax on Turkey’s commercial life is not well understood. This article assembles a new dataset of firms operating in Istanbul to show the tax led to a dramatic rise on the liquidation of enterprises with non-Muslim ownership but no effect on Muslims. At the same time, the tax caused a sharp decline in the formation of new non-Muslim firms and a commensurate increase in the number of Muslim firms. The results show that the Wealth Tax forced the dissolution of otherwise productive, older firms and contributed to the further nationalization of the economy.

Under the legacy of dominant transport appraisal approach, which mainly relies on traditional cost-benefit assessment (CBA) analyses, candidate policies and associated projects are evaluated in a way to take primarily aggregate information into account. Although it is practical to use these methods, working with aggregate values leaves every kind of disparities aside and individual level information is lost in aggregation. This means that we need better economic models doing more than reducing outcomes of evaluated policies to numerical aggregates and averages. This study proposes a hybrid approach to grasp the heterogeneity among different agents and to endogenise interactions among different markets. A discrete choice theory-based household residential location and transport mode choice model and a traffic equilibrium model based on Wardrop’s principles are embedded in a traditional computable general equilibrium (CGE) model representing a closed urban economy. This requires fully integrating three different models (economic model, household location and mode choice model, traffic equilibrium model) using a single mathematical framework. The proposed integrated model is tested using pseudo data of a city with four districts where connection between districts are provided through two-way roads passing through a central district. Households are categorised according to their residential location, working location, preferred commuting mode and social status. Different types of transport policies (i.e. capacity increase in private transport, public transport improvement) are evaluated and impacts of these policies on such parameters like household distribution, households’ demands on consumption goods and housing, housing prices are analysed.

In this paper we develop a dynamic model of a multi-sector economy with an informal sector and segmented labour markets first to demonstrate how informal production and employment decline in transition towards the steady state, and second to analyse the impact of various labour market policies at the steady state. Our results primarily indicate that informal employment share increases with minimum wage, and decreases with reductions in the payroll taxes, moreover, reducing the tax imposed on employer is more effective in reducing the informal employment share, while reducing the tax imposed on employee is more effective in increasing consumer felicity.

In a simple reciprocal dumping model of trade, this study scrutinizes the strategic role of trade and commodity taxes as environmental instruments when consumption of an imported product generates pollution. The results suggest that both trade and commodity taxes have important implications on countries’ integration through trade. For sufficiently small values of the marginal disutility from pollution, the country claiming responsibility for pollution prefers commodity taxes over import tariffs, and compared to the case of trade policies, free trade can be maintained for larger values of the marginal disutility from pollution when commodity taxes are used strategically as environmental instruments.

This study focuses on the effects of public policies on the size distribution of income in Turkey. To this end, an intertemporal dynamic equilibrium model with heterogeneous agents in a small open economy framework is constructed. This study serves several extensions to the literature via its algebraic structure and the calibration process in which various micro-level data sets are utilized. The results reveal that, in line with the previous findings of the literature, increasing budget allocations to unilateral social transfer programs has no significant effect on the size distribution of income and has adverse effects on the labor market decisions of relatively poor laborers. On the contrary, subsidizing the cost of labor has positive impacts on labor supplies and the size distribution of income improves in favor of relatively poor households.

In the last decades, many developing countries abandoned their existing policy regimes and adopted inflation targeting (IT) by which they aimed to control inflation through the use of policy interest rates. During the period before the crisis, most of these countries experienced large appreciations in their currencies. Given that appreciation helps central banks curb inflationary pressures, we ask whether central banks in developing countries have different policy stances with respect to depreciation and appreciation in order to hit their inflation targets. To that end, we analyze central banks’ interest rate decisions by estimating a nonlinear monetary policy reaction function for a set of IT developing countries using a panel threshold model. Our findings suggest that during the period under investigation (2002-2008), central banks in developing countries implementing IT tolerated appreciation by remaining inactive in case of appreciation, but fought against depreciation pressures beyond some threshold. We are unable to detect a similar asymmetric response for IT advanced countries suggesting that asymmetric policy stance is peculiar to IT developing countries. Although there is a vast literature on asymmetric responses of various central banks to changes in inflation and output, asymmetric stance with regards to exchange rate has not been analyzed yet in a rigorous way especially within the context of IT developing countries. In this sense, our study is the first in the literature and thus is expected to fill an important gap.

This study investigates the factors that may influence the obesity in Turkey which is a developing country by implementing Quantile Regression (QR) methodology. The control factors that we consider are education, labor market outcomes, household income, age, gender, region and marital status. The analysis is conducted by using the 2008, 2010 and 2012 waves of the Turkish Health Survey (THS) prepared by the Turkish Statistical Institute (TURKSTAT). The obesity indicator in our study is the individual’s Body Mass Index (BMI). QR regression results provide robust evidence that additional years of schooling has negative effect on individual’s BMI and this effect significantly raises across different quantiles of BMI. QR results also indicate that males tend to have higher BMI at lower quantiles of BMI, whereas females have higher BMI at the top quantiles. This implies that females have higher tendency to be obese in Turkey. Our findings also imply that the positive effect of age on individual’s BMI levels raises across the quantiles at a decreasing rate. In addition, the effect of living in urban or rural areas do not significantly differ at the highest quantile distributions of BMI. Our results also reveal that the negative effect of being single on BMI increases gradually in absolute value across the quantiles of BMI implying that single individuals have less tendency to be obese or overweight compared to the married or widowed/divorced individuals. Moreover, the negative effect of being in labor force on individual’s BMI increases across the quantiles of BMI implying that an individual is more likely to be obese if he/she is out of labor force. Finally, the impact of household income on BMI is positive and significant at all quantiles.

In this study we examine the association between parents’ socioeconomic status (SES) and childhood health in Turkey, a middle income, developing country using the 2013 round of Demographic Health Survey (DHS) data set. In our investigation, we focus on children from 7 to 59 months old and as a measure of health status, we use the height-for-age z-score, which is the measure of stunting and wasting. In order to overcome the biases with respect to age and gender, we calculate the child’s standardized height measure. Using classical regression techniques, after controlling for the child’s birth order, birth weight, mother’s height, mother’s breastfeeding, nutrition status and pre-school attendance, the impact of parent’s SES on child’s health measures is assessed, and parents’ SES indicators include region of residence, number of household members, father’s presence, parents’ education and work status, and household wealth index based on the household’s asset holdings. Our results indicate that while mother’s education and occupation type are among the leading factors that affect the child’s health status, urban residence appears to be the dominant factor which positively affects child’s health: SES of families proxied by living conditions and infrastructure factors such as sanitation, access to clean water, availability of electricity, which are under the control of local governments, as well as access to health care services must be improved for better child health.

Dünya ekonomisinin son üç onyıldaki hızlı finansallaşması bağlamında, Türkiye’de para politikalarının geçirdiği evrimi konu alan bu yazı, kısa ve tanıtıcı Prolog da dâhil olmak üzere, dört bölümden oluşmaktadır. İkinci Bölüm’de 1980-2001 döneminde Türkiye’de para politikaları ve merkez bankacılığı (anlatının arka planına uluslararası gelişmeler yerleştirilerek) incelenmektedir. Çalışmanın en geniş ve ayrıntılı kısmını oluşturan Üçüncü Bölüm’de 1999-2001 Krizi ve 2001 tarihli (yeni) Merkez Bankası Kanunu’nun ardından Türkiye’de para politikalarının nasıl tasarlandığı ve yürütüldüğü ele alınmakta, bu politikaların eriştiği başarı düzeyleri tartışılmaktadır. Dördüncü (ve son) Bölüm, yazıyı sonuçlandırıcı gözlem ve değerlendirmelere ayrılmıştır. Makalenin bulguları TCMB’nin başarı veya başarısızlığının önemli ölçüde finansal akımlar ve enerji ve hammadde fiyatları gibi kendi etkisi dışındaki gelişmeler tarafından belirlendiğini göstermektedir. TCMB’nin daha etkin ve toplumsal olarak daha faydalı politikalar izlemesinin ön koşulu, bu kısıtların yapısal olarak aşılmasına bağlıdır.

This study scrutinizes the ramifications of a consumer-surplus standard in approvals of mergers & acquisitions (i) on an investor's choice between acquiring a firm's existing assets (via negotiations or auctions) and investing in new assets under both complete and incomplete information; and (ii) on welfare. Any firm acquisition fulfilling the consumer-surplus standard is in the best interest of the investor, who prefers to be well informed on acquisition gains and prefers sequential offers. A local firm appropriates a bigger share from acquisition gains in an auction, and prefers generating information asymmetries. Welfare improves with a larger scope for ex-post firm heterogeneity.

We scrutinize the scope of auctions for firm acquisitions in the presence of downstream interactions and information externalities. We Show that no mechanism exists that allows an investor to acquire a low-cost firm under incomplete information: a separating auction implies adverse selection and relies substantially on commitment to allocation and transfer rules. A pooling auction serves as a commitment device against ex-post opportunistic behavior and alleviates adverse selection. It can earn the investor a higher expected payoff than a separating auction, even when consistency is required as to qualify for a sequential equilibrium.

This study examines the trends in Turkey’s participation in Global Value Chains (GVCs), particularly through backward integration (i.e. vertical specialization-VS or the foreign content of value added in exports) between 1995 and 2011 utilizing the World Input Output Database (WIOD), and this is the first attempt to adopt WIOD for analyzing VS in Turkish exports at sectoral and trade partner dimensions. The findings show that Turkey’s VS has increased between 1995 and 2011. Considering the sectoral trends in manufacturing with respect to technological classification, especially in the 2000’s, Turkey’s VS share in mid-high and high-tech sectors has increased faster than that in mid-low as well as low tech sectors. At individual partner level, Germany, China, Italy and France play important roles in VS of Turkish exports. Although Germany sustained the largest contribution to Turkey’s VS up to 2010, in 2010 China became the top contributing country; however this contribution is chiefly in a low-tech industry such as textiles, thus is not necessarily conducive to Turkey’s upgrading her position in GVCs. In that respect, integration into the GVCs through technology-intensive sectors via the technology imported from developed countries might better help improve Turkey’s position in the world markets.

This paper empirically investigates the impact of real exchange rates (RER) on growth of a large number of advanced (AE) and developing economies (DE) by employing the recent non-stationary panel data estimation procedures to estimate conventional growth models augmented with global financial and monetary conditions variables. Our results suggest that, the expansionary depreciation findings for DE are often based on a misinterpretation of an error correction mechanism coefficient. We find that external variables representing global financial and monetary conditions are strongly significant in explaining growth in DE along with the conventional variables including trade openness, human capital, domestic savings. Our data support the view that RER depreciations are contractionary for DE with high external debt and expansionary for AE. Higher trade openness enhances the contractionary impact of RER depreciations in both AE and DE. These results are found to be robust for different RER and per capita real income measures.

This paper attempts to examine the influence of disability status on labor force participation of males aged between 25 and 64. Our attention is only on males in order to avoid complications arising from gender differences in disability and labor force participation. The data is from Turkish Health Survey (THS) for the year 2012 prepared by Turkish Statistical Institute (TURKSTAT). We believe that revealing the differences in labor outcomes that can be attributed to disability status of individuals would be important to understand labor market dynamics of a developing and young populated country; Turkey. We define disability as an impairment of long term health conditions that lasts more than six months which restricts individual in daily activities and categorize individuals as non-disabled, disabled with no limitations, disabled with some limitations and disabled with severe limitations by controlling work related disabilities. In the first part of the study we provide descriptive analysis on the relationship between disability status and labor market states. We observe that higher share of disabled individuals with severe limitations are out of labor force in every age and low educated individuals experience more disabilities. In the second part, we first estimate probit equations in order to see the relationship between disability and labor force participation, then we implement propensity score matching (PSM) techniques in order to overcome selection bias. PSM results indicate that severe disability prevents males from entering into the labor force, whereas being non-disabled increases the probability of being in the labor force.

This study provides causal effect of education on health behaviors in Turkey which is a middle income developing country. Health Survey of the Turkish Statistical Institute for the years 2008, 2010 and 2012 are used. The health behaviors considered are smoking, alcohol consumption, fruit and vegetable consumption, exercising and one health outcome namely, the body mass index (BMI). We examine the causal effect of education on these health behaviors and the BMI Instrumental variable approach is used in order to address the endogeneity of education to health behaviors. Educational expansion of the early 1960s is used as the source of exogenous variation in years of schooling. Our main findings are as follows. Education does not significantly affect the probability of smoking or exercising. The higher the education level the higher the probability of alcohol consumption and the probability of fruit and vegetable consumption. Higher levels of education lead to higher BMI levels. This study provides a baseline for further research on the various aspects of health behaviors in Turkey.

Drawing on cognitive science, child psychology, and economics literature, this paper investigates the significance of early child development and the environmental factors that affect early child development. Earlier literature has established that the child’s brain development is almost complete in the first three years of life, and this development is critically affected by the child’s environment, including the family’s socioeconomic status and the availability of early child education and care. The young child requires adequate psycho-stimulation for the optimal development of the brain in the first few years of life, which subsequently helps her accomplish at school and achieve in adulthood. It has been emphasized in the literature that in order for all young children start life at an equal footing, governments should provide equal opportunities for early childhood education and care where families are not able to provide. In this paper, we compare and contrast the current status of early child education in Turkey with that of selected developed countries, which have advanced far in early childhood education. Despite the striking evidence on the affirmative effects on the individual as well as the individual’s contributions to social and economic development, early childhood education (particularly up to age three) is not considered to be a priority in the education system in Turkey.

This study explores the empirical validity of the purchasing power parity (PPP) hypothesis between Turkey and its four major trading partners, the European Union, Russia, China and the US. Accounting for the possible nonlinear nature of real exchange rates, mainly due to the existence of transaction costs, we employ a battery of recently developed nonlinear unit root tests. Empirical results reveal that nonlinear unit root tests deliver stronger evidence in favor of the PPP hypothesis when compared to the conventional unit root tests only if nonlinearities in real exchange rates are correctly specified.

This study aims to investigate the cost efficiency of Turkish commercial banks over the restructuring period of the Turkish banking system, which coincides with the 2008 financial global crisis and the 2010 European sovereign debt crisis. To this end, within the stochastic frontier framework, we employ a modified version of the true fixed effect model of Greene (2005), where the unobserved bank heterogeneity is integrated in the inefficiency distribution at a mean level. To select the cost function with the most appropriate inefficiency correlates, we first adopt a search algorithm and then utilize the model averaging approach of Huang and Lai (2012) to verify that our results are not exposed to model selection bias. Overall, our empirical results reveal that cost efficiencies of Turkish banks have improved over time, with the effects of the 2008 and 2010 crises remaining rather limited. Furthermore, not only the cost efficiency scores but also impacts of the crises on those scores appear to vary with regard to bank size and ownership structure, in accordance with much of the existing literature.

This paper models competition among multinational firms in an environment of firm heterogeneity, incomplete cost information and strategic interaction. In this context, FDI serves as a signal of productivity: when firms sort into exporters and multinationals, they also show whether they have low or high productivity. We show that the signaling effect of FDI increases the FDI incentive as firms would like to avoid sending a low productivity signal.

This study explores the empirical validity of the Feldstein-Horioka puzzle for China in thepresence of structural breaks. To this end, we employ the recently proposed multiple-break cointegration test of Maki (2012), along with the one-break Gregory and Hansen (1996) cointegration test. Once the existence of the cointegration between domestic savings and investment is ensured by allowing for endogenous structural breaks, Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) estimation procedures are implemented to obtain reliable inferences from the cointegrating regression. Empirical results reveal that the relationship between Chinese domestic savings and investment has changed with the regime shift towards flexible exchange rates and the 2008- 2009 global financial crises. More specifically, with the introduction of managed floating exchange rate regime, a substantial reduction is observed in the almost unitary saving retention coefficient of the fixed exchange rate period. Furthermore, the correlation has experienced a slight increase since 2009, which coincides with the worldwide protectionist policies adopted in the depth of the global financial crisis.

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.

This paper focuses on the impacts of the recent global crisis on the Turkish economy and the policy measures taken in response to the crisis. Turkish economy was adversely affected by the crisis through mainly three channels, namely expectations channel, trade channel and financial channel. The distinctive characteristic of the crisis was a severe export shock which can account for an important part of the decline in production in Turkey. Beside this, a significant sudden stop in financial flows worsened the credit conditions in the economy. As a result, the Turkish economy witnessed one of its worst economic down-turns after the Second World War. In fact, the Turkish growth performance was one of the worsts among developing countries. However, as opposed to previous crises, the financial markets in Turkey and many other developing countries did not experience a collapse. We argue that this is mainly related to the small magnitude and short duration of the financial shocks hitting Turkey and other developing countries relative to the ones in the previous decades. In this sense, the Turkish economy might not have been fully tested during the last global crisis. How the economy will behave in case of a larger financial shock is still unknown.

Bu calisma gelismis ve gelismekte olan ulkelerde cari ve finansal hesaplari kuresel dengesizlikler ve kriz tartismalari isiginda anlamaya calismaktadir. Makalenin iki temel tezi vardir. Birincisi, son kursel krizin harici kaynaklarini anlamak icin net finansal akimlara/cari hesaplara odaklanmak yaniltici olabilir. Minsky-Kindleberger modeline eklemlenmis bir burut akimlar yaklasimi son kuresel krizin harici kaynaklarini cok daha iyi aciklayabilir. Ikincisi, cari hesaplar ve net finansal akimlar gelismis ulkelere gore gelismekte olan ulkelerde daha anlamli gostergelerdir. Burut akimlar derin finansal piyasalari olan ulkelerde onem kazanirken, net finansal akimlar kirilganliklarin harici kaynaklarini anlamak icin gelismekte olan ulkelerde daha gecerli gostergelerdir. Bunun sebebi doviz kuru ve doviz rezervleri gibi etmenlerin gunumuz kuresel finans duzeninde gelismekte olan ulkeler icin hayati bir oneme sahip olmasidir.

This paper investigates wage inequality and wage mobility in Turkey using the Surveys on Income and Living Conditions (SILC). This is the first paper that explores wage mobility for Turkey. It differs from the existing literature by providing analyses of wage inequality and wage mobility over various socioeconomic groups such as gender, age, education and sector of economic activity. We first present an overview of the evolution of wages and wage inequality over the period 2005-2011. Next, we compute several measures of wage mobility and explore the link between wage inequality and wage mobility. Further, we compute the transition matrices which show movements of individuals across the wage distribution from one period to another and investigate the determinants of transition probabilities using a multinomial logit model. The results show that overall the real wages increased over the study period and wage inequality exhibits a slight increase.. Wage inequality is one of the highest among the European Union (EU) countries. The wage mobility in Turkey is lower than what is observed in the European Union countries although it increases as time horizon expands. Wage mobility has an equalizing impact on the wage distribution, however; this impact is not substantial enough to overcome the high and persistent wage inequality in Turkey.

This study investigates export and import dynamics of Turkey in the context of the main Broad Economic Classification (BEC) sectors. Our results suggest that the trade equations do not remain stable when an endogenously estimated regime change is taken account. According to our results, consistent with the elasticity pessimism literature, real exchange rate elasticities of exports and imports are considerably low in absolute value. Exports and imports are basically determined by world real output and domestic real income, respectively, with substantially high elasticities. Consistent with the fact that Turkish integration to global value chains has substantaily increased during the post-2000 period especially in intermediate and capital goods sectors, the real exchange elasticities of exports and imports decrease (in absolute value) during the recent period. Our results suggesting that the external income elasticity of exports, for all sectors, is substantially higher than the domestic income elasticity of imports support that the Houthakker and Magee findings still remains a puzzle even under case of the higher participation in the global value chains.

Bu calismada, Turkiye’nin dis ticaret dinamikleri inclenmekte ve ozellikle imalat sanayi (IS) sektorleri icin reel doviz kuru degismesinin dis ticarete etkisi arastirilmaktadir. Bu amacla, ihracat, ithalat ve uretimin belirleyicilerinin teknoloji yogunlugu, urun yetkinligi, ithalat bagimliligi, ihracat yonelimi, kuresel deger zincirlere eklemlenme derecesi, borc dolarizasyonu gibi sektore ozgun degiskenlere de bagli olup olmadigi ampirik olarak incelenmektedir. Calisma sonuclarina gore, Turkiye dis ticaret aciklari, temelde orta-yuksek ve yuksek teknoloji yogunlugu olan urun ithalatindan kaynaklanmaktadir. Sonuclara gore, 1990’li yillarla karsilastirildiginda, 2000’li yillarda ozellikle orta-yuksek ve yuksek teknoloji urunlerinde, IS sektorlerinin kuresel katma deger zincirlerine eklemlenme derecesi yuksek oranda artmistir. Bu eklemlenme, agirlikli olarak sektorlerin geri eklemlenme derecelerinde sicramali bir artis olarak gerceklesmis ve ihracatta yurtici katma deger oraninin yuksek oranda dusmesiyle eklemlenmenin net kaybi daha da artmistir. Esneklik kotumserligi yazini ile tutarli olarak, hem GEGS hem de IS sektorleri ihracat ve ithalatinin reel doviz kuru esnekliginin mutlak degeri goreli olarak dusuk bulunmustur. Ihracat ve ithalat, sirasiyla, agirlikli olarak yurtdisi (OECD) ve yurtici reel gelir tarafindan belirlenmektedir ve esneklikler cok yuksek duzeydedir. Orta-yuksek ve yuksek teknoloji yogunlugu urunlerinin yurtdisi reel kosullara olan duyarliliginin, digerlerine gore, cok daha yuksek oldugu bulunmustur. Urun yetkinligi temelindeki sonuclar da bu onermeyi desteklemektedir. 2001 yili sonrasinda, ihracatin yurtdisi talep esneklikleri tum teknoloji yogunlugu ve urun yetkinligi sektorlerinde sicramali olarak artmistir. Reel doviz kurunun dis ticaret etkisi sektorlerin teknoloji yogunlugu, urun yetkinligi, ithal girdi bagimliligi veya ihracat yonelim derecelerine gore degismektedir. Borc dolarizasyonu ile dis ticaretin reel kur esnekliklerinin ve IS uretiminde olumsuz bilanco riskinin arttigi bulunmustur. Sonuclara gore, IS sektorleri uretimi sadece yurtdisi reel kosullar tarafindan degil kuresel finansal kosullar tarafindan da belirlenmektedir. Reel doviz kurunun uretime etkisi sektorun dis ticaret yapisindan bagimsiz degildir. Tum bu sonuclar, surdurulebiilir yuksek buyume orani ve dusuk dis ticaret acigi icin, reel doviz kuru politikalari yerine, orta-yuksek ve yuksek teknoloji urunleri sektorlerinde kuresel deger zincirlerine ileri eklemlenme derecesini artirmaya yonelik stratejik sanayi politikalarinin tercih edilebilir oldugunu gostermektedir.

In the recent global turmoil, even though some developing economies were severely affected, in general, developing countries survived the crisis with less damage than advanced countries. The majority of developing countries did not experience a financial system collapse. What are the main factors behind the solid performance of many developing countries in the recent crisis? This paper argues that the main reason is the fact that developing countries did not face a strong financial account shock, especially in the form of capital reversals, during this period. In comparison to past developing country crises of the 80s and 90s, the financial account shocks in the global crisis were much more moderate. To a great extent, the fact that advanced countries could not fully serve their roles as safe havens in the global crisis explains why developing economies were not tested by destructive financial shocks in the recent crisis. Furthermore, developing countries enjoyed greater autonomy and legitimacy in implementing expansionary monetary and fiscal policies without much fear of the bigger financial shocks in an environment in which international cooperation partially meet the need for an international lender of last resort through swap operations and credit lines. If the developed countries, essentially European Union (EU) and the US, start serving fully their safe haven roles and the returns in the developed countries become much more attractive, developing countries may face larger external financial shocks. Even large reserves, flexible exchange rate regimes, healthy balance sheets on the papers and some so-called other strong fundamentals would not be enough to avoid financial collapses.

Doviz kuru ortuk bir politika araci olarak enflasyon hedeflemesi uygulayan gelismekte olan ulkelerde kullanilmis olabilir mi? Bu makale bu soruyu cevaplamak ve enflasyonun belirleyicilerini incelemek icin ornek olarak Turkiye’nin 2002-2008 arasindaki enflasyon hedeflemesi deneyimini incelemektedir. Makalenin temel bulgulari sunlardir: Birinci olarak, Vektor Autoregressif (VAR) modelinden elde edilen sonuclar gostermektedir ki, bu donemde Turkiye’de enflasyonun temel belirleyicileri talep yanli unsurlar degil uluslararasi meta fiyatlari ve doviz kuru gibi arz yanli unsurlardir. Bu durumda, yerli paranin (TL’nin) bu donemde onemli olcude degerlendigini de dusundugumuzde, Turkiye Cumhuriyeti Merkez Bankasi’nin (TCMB) enflasyonla mucadelesinde liranin degerlenmesinden faydalandigi aciktir (bkz. Sekil 2). Bir baska deyisle, 2002-2008 yillari arasinda Turkiye’de yasanan dezenflasyon sureci onemli olcude doviz kurlarinda yasanan gelismelerle aciklanabilir. Ikincisi, ampirik kanitlar gostermektedir ki, TL’nin degerlenmesi TCMB’nin doviz kuruna yonelik asimetrik politika durusuyla iliskilidir. Hem VAR modeliyle yapilan ekonometrik analize hem de betimleyici istatistiklere gore soz konusu donemde liranin degerlenmesine izin verilmis/desteklenmis buna karsin deger kaybi durumunda saldirgan bir sekilde mudahale edilmistir. Biz enflasyon rejimleri altindaki bu durusu “ortuk asimetrik doviz kuru capasi” olarak tanimliyoruz.

This paper investigates how informality can be defined and measured in the Turkish labor market. Two alternative definitions of informality are used to explore their relevance and implications for the Turkish labor market using descriptive statistics. They are the enterprise definition and the social security definition. Further, contributions of individual and job characteristics to the likelihood of informality are investigated using multivariate probit analysis under the two definitions. The social security registration criterion is found to be a better measure of informality in the Turkish labor market given its ability to capture the key relationships between several individual and employment characteristics and the likelihood of informality. The study suggests that preference should be given to social security definition of labor informality for a more accurate depiction of the Turkish labor market. The suitability of the two alternative definitions of informality in the Turkish labor market and its implications have not been investigated before.

This paper investigates the effectiveness of private tutoring in Turkey. The authors introduce their study by providing some background information on the two major national examinations and three different kinds of tutoring. They then describe how they aimed to analyse whether attending private tutoring centres (PTCs) enhances Turkish students’ academic performance. By way of multiple linear regression analysis, their study sought to evaluate whether the impact of private tutoring varies in different subject areas, taking into account several student-related characteristics such as family and academic backgrounds as well as interest in and perception of academic success. In terms of subject areas, the results indicate that while private tutoring does have a positive impact on academic performance in mathematics and Turkish language, this is not the case in natural sciences. However, as evidenced by the effect sizes, these impacts are rather small compared to the impacts of other variables such as interest in and perception of academic success, high school graduation fields of study, high school cumulative grade point average (CGPA), parental education and students’ sociocultural background. While the authors point out that more research on the impact of further important variables needs to be done, their view is that school seems to be an important factor for determining students’ academic performance.

Son donemlerde dunya genelinde artan gelir esitsizlikleri, iktisatcilarin dikkatlerini esitsizlikleri dengeleyici faktorlerden biri olarak gorulen bireylerin gelir durumlarini daha ust ya da daha alt gelir gruplarina tasiyabilmeleri olarak adlandirilan gelir hareketliligi konusuna cevirmelerine neden olmustur. Gelir hareketliligi ve esitsizlikler uzerindeki etkileri 2000’li yillardan sonra ve daha cok gelismis ulkeler icin incelenmeye baslanmis ve genel bir sonuca ulasmak icin henuz yeterli sayida calisma yapilmamistir. Bu calisma gelir dagilimi en adaletsiz ulkeler arasinda yer alan Turkiye icin bir gelir esitsizligi ve gelir hareketliligi analizi yaparak gelismekte olan ulke ornegi ile literature katki sunmayi amaclamaktadir. Calismadan elde edilen sonuclar ozetle soyledir: i) Ele alinan donem uzadikca gelir hareketliligi atmaktadir ancak bu hareketlilik gelir esitsizligini azaltici nitelikte degildir. ii) Gelir dagiliminin an alt ve en ust gruplari diger gruplara gore daha hareketlidir. iii) Ele alindan alt donemlerde en alt gelir grubundaki bireylerin %30’u issiz durumuna duserken, yalnizca %1,5’i en ust gelir grubuna yukselebilmistir.

This is the first study which provides empirical analysis of the variation in health behaviors for adult men and women in Turkey which is a developing country. The health behaviors considered are smoking, drinking, fruit and vegetable consumption, exercise and body mass index (BMI). We find that in Turkey education is the most important factor that affects the health behaviors. The results indicate that smoking is positively associated with education at all levels with a decreasing effect with the level of education unlike in the developed countries. This result indicates that smoking is a serious public health problem in Turkey at all levels of education. Further, alcohol consumption and schooling are positively related and it increases by the level of education. Higher educated individuals clearly eat more fruits, vegetables and exercise more and their BMI levels are in the normal range compared to less educated and illiterate. We also highlight the importance of demographic factors, labor market status and household income. We use Health Survey of Turkish Statistical Institute (TURKSTAT) for years 2008, 2010 and 2012. This study will provide a baseline for further studies on the various aspects of health behaviors in Turkey.

This paper explores the causes of skill-based employment differentials within the Turkish manufacturing sector over the period 1980-2001. Turkey is taken as an example of a developing economy that, in that period, had been technologically advancing and becoming increasingly integrated with the world market. The empirical analysis is performed at firm level within a dynamic framework using a two-equation model that depicts the employment trends for skilled and unskilled workers separately. In particular, the System Generalized Method of Moments (GMM-SYS) procedure is applied to a panel dataset comprised of 17,462 firms. Our results confirm the theoretical expectation that developing countries face the phenomena of skill-biased technological change and skill-enhancing technology import, both leading to increasing the employment gap between skilled and unskilled workers. In particular, strong evidence of an absolute skill bias emerges: both domestic and imported technologies increase the demand for skilled workers only, not significantly affecting the demand for the unskilled labor. Finally, “learning by exporting” also appears to have a (relative) skill biased impact, increasing the demand for skilled workers to a much larger extent than that for the unskilled.

This paper investigates the impacts of domestic and external factors along with exchange rate regimes on business cycles in a large panel of advanced and emerging market economies by employing panel logit, cointegration and autoregressive distributed lag model estimation procedures. The results for classical business cycles suggest that emerging market economies tend to experience much deeper recessions and relatively steeper expansions during almost the same duration. The probability of expansions significantly increases with exchange rate regimes flexibility. Our results, different from the bipolar view, strongly support exchange rate regime flexibility for both AE and EME other than the East Asian countries. The impacts of external real and financial shocks and domestic variables are significantly greater under managed regimes as compared to floats. Our results strongly suggest that the evolution and determinants of both classical business and growth cycles are not invariant to the prevailing exchange rate regimes.

We examine the effects of international trading activities of firms on creating productivity gains in Turkey by using a recent firm level dataset over the period 2003-2010. We establish treatment models and investigate the productivity improvements of firms through trade by using Propensity Score Matching (PSM) techniques along with Difference-in-Difference (DID) estimates. Three different groups of treatment are constructed: (i) firms that involve only in importing activities, (ii) firms that involve only in exporting activities, (iii) firms that involve in both exporting and importing activities. The results of the study suggest that both exporting and importing have positive significant effects on total factor productivity (TFP) and labor productivity (LP) of firms. Importing is found to have a greater impact on productivity of firms compared to exporting. Further, two-way trade is found to have more significant effects than those of one-way trade on firm productivity Finally, our results indicate that international trade has greater impact on LP rather than TFP of firms.

During last sixty years, Turkish population moved from one province to another at the rate of about 7-8 percent per five-year interval. As a consequence of this massive internal migration, population residing in a province other than the one they were born in increased from 12 percent in 1950 to 39 percent in 2011. Impact of this population instability on provincial turnout rates in 2011 parliamentary election is studied, controlling for the effects of other socio-economic, demographic, political and institutional factors. Consequences of migration both at destinations and origins are considered. According to robust regressions estimated, the relationship between turnout and education is inverse U-shaped, and between turnout and age, U-shaped. The latter reflects generational differences as well. Large population, large number parliament members to be elected from a constituency, participation by large number of parties, and existence of a dominant party depress the turnout rate. A percentage increase in the proportion of emigrants among the people born in a province reduces turnout rate in that province by 0.13 percentage points, while a percentage increase in the ratio of immigrants in the population of a province reduces it by 0.06 percentage points. However, at destinations where large numbers of immigrants from different regions are concentrated, the opportunity afforded to immigrants to elect one of their own, reduces the latter adverse impact significantly and in some cases turns it to positive.

The purpose of this study is to explore the employment effects of changes in manufacturing output resulting from changes in trade patterns over the period 1995-2006. For 30 countries (21 OECD and 9 non-OECD countries) we estimate the changes in embodied labor content due to trade using the factor-content analysis by breaking up the sources of these changes between the trade with the North, the South and China. We also decompose changes in employment into its components as changes within and across sectors. Our results present a net negative impact of trade on total employment in 30 countries over the period of analysis (despite employment gains in 17 countries). In all countries (except for Philippines and Republic of Korea) trade with China has a negative impact on total employment with a stronger negative effect on women’s employment. Employment losses in the South due to surge in imports from China are coupled with declining exports to the North as many countries in the North shift their imports to emerging economies in Asia. Decomposition results indicate that decline in the share of women’s employment is mainly due to shifts between sectors rather than within sector changes. Changes in women’s employment are still highly dependent on the movements in ‘traditional’ manufacturing sectors including food, textiles and wearing apparel.

Two of the primary issues of the next Common Fisheries Policy (CFP) reform are maximum sustainable yield (MSY) and transferable fishing concessions (TFCs). The European Commission agreed on implementing TFCs under some major principles including reserving a part of total quotas for small-scale fishermen in order to prevent the reduction in the fish catching sector employment. Besides, the European Commission set the goal of achieving MSY for all European fisheries by 2015. The interrelation between these two objectives should be well understood. In this study, the impact of fishing on total biomass is analyzed under an age-structured model, and the potential effects of TFCs on the achievement process of MSY harvesting conditions are explained. It is shown that the implementation of TFCs, under the major principles defined by the European Commission, has an impact on both the total biomass growth and the time path to reach the goal of MSY. The paper concludes that initial allocation of quotas does matter since reserving quotas for small-scale fishermen reduces the time needed to achieve MSY.

Foreign language skills represent a form of human capital that can be rewarded in the labor market. Drawing on data from the Adult Education Survey of 2007, this is the first study estimating returns to foreign language skills in Turkey. We contribute to the literature on the economic value of language knowledge, with a special focus on a country characterized by fast economic and social development. Although English is the most widely spoken foreign language in Turkey, we initially consider the economic value of different foreign languages among the employed males aged 25 to 65. We find positive and significant returns to proficiency in English and Russian, which increase with the level of competence. Knowledge of French and German also appears to be positively rewarded in the Turkish labor market, although their economic value seems mostly linked to an increased likelihood to hold specific occupations rather than increased earnings within occupations. Focusing on English, we also explore the heterogeneity in returns to different levels of proficiency by frequency of English use at work, birth-cohort, education, occupation and rural/urban location. The results are also robust to the endogenous specification of English language skills.

Bu makalenin amaci Turkiye'de Ozel Dershane sisteminde yeni gelismeleri ortaya koymaktir. Bir ust ogrenim duzeyine geciste uygulanan sinavlarin Ozel Dershanelere talebi kamciladigina inanilmaktadir. Bunun otesinde, dagilimda adaleti degerlendirmek uzere Ozel Dershanelerin ve ortaogretim okullarinin Turkiye'de illere gore dagilimina isik tutmayi amacliyoruz. Ozel Dershanelerin ve ortaogretim okullarinin zaman icinde gecirdigi evrim betimlenmekte ve karsilastirilmaktadir. Ozel Dershanelerin, liselerin ve ortaogetim (lise) cagindaki nufusun illere gore dagilimi karsilastirilmaktadir. Bu dagilim ozellikleri, dagilimda adalet konularini aciklamak uzere degerlendirilmektedir. Ortaogretime devam eden lise cagindaki nufusun illere gore dagilimi ile ortaogretim ogrencilerinden Ozel Dershanelere devam edenlerin illere gore dagilimi karsilastirilmistir. Kanitlarin ortaya koyduguna gore, Ozel Dershanelerin ve ortaogretim okullarinin ozellikleri ilden ile onemli degiskenlikler gostermektedir. Ozel Dershanelerin dagilimi, ortaogretim okullarinin dagilimina gore adaletsizdir. Ulkenin daha cok dogu ve guneydogusunda yer alan illerde Ozel Dershaneler ve ortaogretim okullari daha dusuk niteliktedir. Bunun otesinde, ortaogretim cagindakilerden Ozel Dershanelere giden ortaogretim ogrencileriyle orta ogretime devam edenlerin sayisinin, bazi illerde daha dusuk olmasi onemli esitsizliklerin gostergesidir. Ozel Dershaneler konusundaki en son gelismelerin gozden gecirilmesi, Ozel Dershanelerin ve ortaogretim okullarinin illere gore dagiliminin incelenmesi ve karsilastirilmasi bu makalenin icerdigi yeniliklerdir.

This paper aims to provide the recent developments on the supplementary education system in Turkey. The national examinations for advancing to higher levels of schooling are believed to fuel the demand for Supplementary Education Centers (SEC). Further, we aim to understand the distribution of the SECs and of the secondary schools across the provinces of Turkey in order to evaluate the spacial equity considerations. The evolution of the SECs and of the secondary schools over time are described and compared. The provincial distribution of the SECs, secondary schools and the high school age population are compared. The characteristics of these distributions are evaluated to inform the about spatial equity issues. The distribution of high school age population that attend secondary schools and the distribution of the secondary school students that attend SECs across the provinces are compared. The evidence points out to significant provincial variations in various characteristics of SECs and the secondary schools. The distribution of the SECs is more unequal than that of the secondary schools. The provinces located mostly in the east and south east of the country have lower quality SECs and secondary schools. Further, the SEC participation among the secondary school students and the secondary school participation among the relevant age group are lower in some of the provinces indicating major disadvantages. The review of the most recent developments about the SECs, examination and comparison of provincial distributions of the SECs and of the secondary schools are novelties in this paper.

2008 krizinde Turkiye gibi bazi gelismekte olan ekonomiler ciddi manada sarsilsalar bile genel itibariyle gelismekte olan ulkeler krizi gelismis ulkelerden daha az zararla atlatmislardir. Gelismekte olan ulkelerin hemen hemen hic birisi finansal bir cokus yasamamistir. Turkiye gibi gelismekte olan ulkelerin ozellikle finansal bir cokus yasamamasinin arkasinda yatan nedenler nelerdir?. Bu makale gelismekte olan ulkelerin dunya krizinden gorece olarak daha az etkilenmis ve finansal bir cokusle karsilasmamis olmalari yasadiklari finansal soklarin onceki donemlerdeki soklara gore daha kucuk olmasindan kaynaklanmaktadir. Bu anlamda bu ulkelerin finansal sistemi kriz sirasinda test edilmis degildir. Gelismekte olan ulkelerin daha dusuk capli bir sok yasamis olmasi gelismis olan ulkelerin kriz sirasinda guvenli liman islevini tam olarak yerine getirememesiyle ilgilidir. Ozellikle merkez ulkelerindeki getiriler artmaya ve merkez ulkeler guvenli liman rolunu yerine getirmeye baslarsa Turkiye ekonomisi ve gelismekte olan ulkeler ic ve dis kaynakli nedenlerle beklentilerdeki ciddi degisimlere bagli olarak daha buyuk soklarla karsilasabilir. Bu da Turkiye gibi gelismekte olan ekonomilerin daha onceki donemlerdekine benzer krizleri yasamasina sebep olabilir

Especially, after the 2000s, many developing countries let exchange rates float and began implementing inflation targeting regimes based on mainly manipulation of expectations and aggregate demand. However, most developing countries implementing inflation targeting regimes experienced considerable appreciation trends in their currencies. Might have exchange rates been utilized as implicit tools even under inflation targeting regimes in developing countries? To answer this question and investigate the determinants of inflation under an inflation targeting regime, as a case study, this paper analyzes the Turkish experience with the inflation targeting regime between 2002 and 2008. There are two main findings of this paper. First, the evidence from a Vector Autoregressive (VAR) model suggests that the main determinants of inflation in Turkey during this period are supply side factors such as international commodity prices and the variation in exchange rate rather than demand side factors. Since the Turkish lira (TL) was considerably over-appreciated during this period, it is apparent that the Turkish Central Bank benefited from the appreciation of the TL in its fight against inflation during this period. Second, our findings suggest that the appreciation of the TL is related to the deliberate asymmetric policy stance of the Bank with respect to the exchange rate. Both the econometric analysis from a VAR model and descriptive statistics indicate that appreciation of the Turkish lira was tolerated during the period under investigation whereas depreciation was responded aggressively by the Bank. We call this policy stance under the inflation targeting regimes as "implicit asymmetric exchange rate peg". The Turkish experience indicates that, as opposed to rhetoric of central banks in developing countries, inflation targeting developing countries may have an asymeyric stance toward exchange rates and favour appreciation of their currencies to hit their inflation targets. In this sense, IT seems to contribute to the ignorance of dangers regarding to over-appreciation of currencies in developing countries.

This paper examines the determinants of military expenditures with a special focus on political regimes for more than 130 countries for the period of 1963-2001 by employing a dynamic panel data analysis. The paper aims at contributing to the literature by utilizing a recently constructed political regimes data set and considering income inequality, a key variable that has not received substantial attention in the context of political regimes, growth and military expenditures. Covering a large set of countries and an extended time period, the paper reveals further evidence on the linkage between democracy and military expenditures. Our results yield two crucial facts. First, social democratic political regimes have a tendency to spend less on armaments as a share of the national income; compared to social democracy all other political regimes are likely to have higher military burdens, confirming previous findings of the negative relationship between level of democracy and military burden. Second, the analysis shows that higher income inequality, regardless of the model specification and inequality measure, is associated with lower military burden.

The impact of unionization on wage inequality has been examined by a vast literature. Focusing mostly on the US and the UK in time series analyses or on OECD countries in panel data analyses, a bulk of these studies have found a negative impact of deunionization (i.e. decline in the union density rate) on distribution of wages. By utilizing two inequality data sets both provided by the University of Texas Inequality Project this paper contributes to the literature, analyzing the causality relationship between deunionization and pay inequality for 24 OECD countries for the 1963-2000 period within a panel Granger structure. Our findings show not only that there is causality from union density to income inequality but also, perhaps more importantly, point out that there is causality running from income inequality to union density for various set of countries and time periods.

This paper investigates the nature of the output-employment relationship by using the Turkish quarterly data for the period from 1988 to 2008. Even if we fail to find a long-run relationship between aggregate output and total employment, there are long-run relationships for the aggregate output with non-agricultural employment and sectoral employment levels for seven of nine sectors that we consider. However, a further investigation for the output and employment relationship within a short-run perspective do not reveal statistically significant relationships for either total employment, or non-agriculture employment or the eight out of the nine sectors that we consider. Thus, it seems that sustainable growth is an essential economic agenda for employment generation concerning the sectors and that there is a long-run link but weak short run link with demand.

This paper focuses on the implications of private tutoring in Turkey for questions of equity regarding the provision of public education, based on an analysis of previously published research. The nature of the private tutoring and its relation to the two national selection examinations in Turkey are also discussed.

One of the main goals stated in the proposals for the Common Fisheries Policy (CFP) reform is achieving maximum sustainable yield (MSY) for all European fisheries by 2015. In this paper, we consider the mechanism design problem for allocation of fishing rights to achieve MSY harvesting conditions. We study an age-structured fish population model and apply this model for a fishing environment including two fishermen having perfect or imperfect fishing selectivity. If we assume that fishermen are non-satiated and they fulfill their remaining quotas through capturing untargeted (less revenue-generating) fish after targeted fish population is fully caught, the fix ratio of the catch of targeted fish to untargeted fish, derived from catchability coefficients, is not valid anymore. As a result, we show that not only the age-structure or fishing technology but also the estimated level of MSY is steering the optimal allocation of quotas. Accordingly, we determine technology-based optimal quota shares for each fisherman at particular MSY levels. We also show that the optimal allocation of fishing quotas does not have a bang-bang nature under imperfect fishing selectivity.

This paper tests and models time varying correlations among agricultural commodity, precious metal and S&500 indices to uncover whether rising trend among these markets is a result of financialization of commodity markets and/or financial crisis. We particularly investigate the roles of market news, global and market volatility on the nature and dynamics of the correlation. Empirical results show that high volatility during financial crisis is the main source of high correlation of agricultural commodity index with S&500 and precious metal index, and plays crucial role in correlation between precious metal index and S&500, possibly due to increasing engagement of financial market investors in commodity markets during financial crisis. Hence, heterogeneous structure of commodity markets delivers better portfolio diversification opportunities during calm periods compared to turmoil periods of financial crisis.

Generational Accounting (GA), developed by Auerbach. Gokhale and Kotlikoff (1991) is an alternative and dynamic method employed in measuring the impact of existing fiscal policies on current and future generations. In contrast to the traditional and static measures of fiscal sustainability, GA method reveals the intergenerational distribution of tax burden and helps identifying the policies that can alleviate the generational imbalance. This paper constructs and presents the first set of generational accounts for Turkey in an attempt to measure the generational gap and compare the Turkish intergenerational fiscal outlook to a number of developed and developing countries. Findings in the paper suggest that there exists a 24.3% fiscal imbalance to the disadvantage of future generations in Turkey. Several hypothetical policy experiments have been implemented in the paper to achieve the generational balance in Turkey.

This paper investigates the job satisfaction in relation to managerial attitudes towards employees and firm size using the linked employer-employee survey results in Britain.We first investigate the management-employee relationships and the firm size using maximum likelihood probit estimation . Next various measues of job satisfaction are related to the management-employee relations via maximum likelihood ordered probit estimates. Four measures of job satisfaction that have not been used often are considered. They are satisfaction with influence over job; satisfaction with amount of pay; satisfaction with sense of achievement and satisfaction with respect from supervisors. Main findings indicate that management-employee relationships are less satisfactory in the large firms than in the small firms. Job satisfaction levels are lower in large firms. Less satisfactory management-employee relationships in the large firms may be a major source of the observed lower level of job satisfaction in them. These results have important policy implications from the point of view of the firm management while achieving the aims of their organizations in particular in the large firms in the area of management-employee relationships. Improving the management-employee relations in large firms will increase employee satisfaction in many respects as well as increase productivity and reduce turnover. The nature of the management-employee relations with firm size and job satisfaction has not been investigated before.

The goal of this paper is to investigate the relationship between type of welfare regimes and military expenditures. There is a sizeable empirical literature on the development of the welfare state and on the typology of the welfare regimes. There appear to be, however, no empirical studies that examine welfare regimes with special attention to military spending. This study aims at providing a comprehensive analysis on the topic by considering several different welfare regime typologies. To do so, we use dynamic panel data analysis for 37 countries for the period of 1988-2003 by considering a wide range of control variables such as type of political regimes, inequality measures, number of terrorist events, and size of the armed forces. Our findings, in line with the literature, show that there is a positive relationship between income inequality and share of military expenditures in the central government budget, and that the number of terrorist events is a significant factor that affects both the level of military expenditure and inequality. Also, the paper reveals a significant negative relationship between social democratic welfare regimes and military expenditures.

This paper employs STCC-GARCH and DSTCC-GARCH models to investigate the time varying return co-movements between Chinese stock markets and stock markets of the US, UK, France and Japan. Unlike the earlier literature, we uncover that there are noticeable rising trends in conditional correlations among these markets particularly following the financial reforms in China. Moreover, the empirical results of DSTCC-GARCH specifications with time and various volatility measures indicate that the correlations increase not only over time but also during calm periods for A-shares, though mixed results are obtained for B-shares.

The mechanism by which monetary policy affects financial institutions’ risk perception and/or tolerance has been called the ‘risk-taking channel’ of monetary policy. It has been recently argued that periods of low interest rates due to expansionary monetary policy, might induce an increase in bank risk-appetite and risk-taking behavior. This paper investigates the bank specific characteristics of risk-taking behavior of the Turkish banking sector as well as the existence of risk taking channel of monetary policy in Turkey. Using bank level quarterly data over the period 2002-2012 a dynamic panel model is estimated. Our sample accounts for 53 banks that have been active in Turkey during the period. To deal with the potential endogeneity between risk and bank specific characteristics, which are explanatory variables in our model, the GMM estimator proposed by Arellano and Bover (1995) and Blundell and Bond (1998) is used. Four alternative risk measures are used in the analysis; three accounting-based risk indicators and a market-based indicator- Expected Default Frequency. We find evidence that low levels of interest rates have a positive impact on banks’ risk-taking behavior for all the risk measures. Specifically, low short term interest rates reduce the risk of outstanding loans; however short term interest rates below a theoretical benchmark increase risk-taking of banks. This result holds for macroeconomic controls as well. Furthermore, in terms of bank specific characteristics, our analysis suggests that large, liquid and well-capitalized banks are less prone to risk-taking.

This paper aims to investigate the actual nature of the interest rate pass-through to Turkish cash, automobile, housing and corporate loan rates. Focusing on the possibility of nonlinearity in the adjustment of lending rates due to financial market conditions and monetary policies, we adopt the threshold autoregressive (TAR) and momentum threshold autoregressive (MTAR) models of Enders and Siklos (2001). Empirical results suggest substantial asymmetries (nonlinearities) in all lending rates. More specifically, banks adjust their lending rates faster in response to increases in negative discrepancies from the long-run equilibrium arising from an increase in the money market rate, while they act slowly following money market rate decreases. Furthermore, the degree of reluctance of banks to follow money market rate decreases appears to vary across lending rates, suggesting the existence of sectoral heterogeneities besides asymmetries.

This paper shows that the structural breaks are an important characteristic of the monthly labor force participation rate (LFPR) series of Australia, Canada and the USA. Therefore we allow for endogenously determined multiple structural breaks in the empirical specifications of fractionally integrated ARMA model. The findings indicate that contrary to the previous research the LFPRs of Australia, Canada and the USA are stationary implying that the informational value of the unemployment rates about the behavior of labor markets and the causes of joblessness are useful.

This paper studies the role of banking sector in monetary policy transmission in Turkey covering the period 1988-2009. Specifically, we investigate the impact of monetary policy changes on banks’ lending behavior. Given the changes in the policy stance and developments in the financial system following the implementation of structural reforms in the aftermath of the 2000-01 crisis, the analysis is further conducted for the two sub-periods: 1988-2001 and 2002-2009, to examine whether there is a change in the functioning of the credit channel. Based on bank-level data, empirical evidence suggests cross sectional heterogeneity in banks’ response to monetary policy changes during 1988-2009. Regarding the results of the pre-crisis and post-crisis periods, we find that an operative bank lending channel existed in 1988-2001, however its impact became much stronger thereafter. Furthermore, there are significant differences in the distributional effects due to bank specific characteristics in the impact of monetary policy on credit supply between the two sub-periods. While the results indicate an operative bank lending channel due to earnings capability and asset quality in the first period, size, liquidity, capitalization, asset quality and managerial efficiency seem to make a difference in the lending responses of banks to monetary policy in 2002-2009.

In this study, we examine the formal/informal sector earnings differentials in the Turkish labor market using detailed econometric methodologies and a novel panel data set drawn from the 2006-2009 Income and Living Conditions Survey (SILC). In particular, we test if there is evidence of traditional segmented labor markets theory which postulates that informal workers are typically subject to lower remuneration than similar workers in the formal sector. Estimation of standard Mincer earnings equations at the mean using OLS on a pooled sample of workers confirms the existence of an informal penalty, but also shows that almost half of this penalty can be explained by observable variables. Along wage/self-employment divide, our results are in line with the traditional theory that formal-salaried workers are paid significantly higher than their informal counterparts. Confirming the heterogeneity within informal employment, we find that self-employed are often subject to lower remuneration compared to those who are salaried. Moreover, using quantile regression estimations, we show that pay differentials are not uniform along the earnings distribution. More specifically, we find that informal penalty decreases with the earnings level, implying a heterogeneous informal sector with upper-tier jobs carrying a significant premium and lower-tier jobs being largely penalized. Finally, fixed effects estimation of the earnings gap depict that unobserved individual fixed effects when combined with controls for observable individual and employment characteristics explain the pay differentials between formal and informal employment entirely, thereby implying that formal/informal segmentation may not be a stylized fact of the Turkish labor market as previously thought.

Several recent empirical studies have examined the gender effects of education on economic growth or on steady-state level of output using the much exploited, familiar cross-country data in order to determine their quantitative importance and the direction of correlation. This paper undertakes a similar study of the gender effects of education using province level data for Turkey. The main findings indicate that female education positively and significantly affects the steady-state level of labor productivity, while the effect of male education is in general either positive or insignificant. Separate examination of the effect of educational gender gap was negative on output. The results are found to be robust to a number of sensitivity analyses, such as elimination of outlier observations, controls for simultaneity and measurement errors, controls for omitted variables by including regional dummy variables, steady-state versus growth equations and considering different samples.

The two major earthquakes which struck northwestern Turkey in 1999, caused enormous amounts of death and destruction, and exposed rampant government corruption involving construction and zoning code violations, as a factor magnifying the disaster. The opposition parties and one of the incumbent parties which participated in previous national governments and held power in current and past municipal administrations were responsible for that. The other two incumbent parties came to power only a short time before the earthquakes and controlled almost none of the local administrations in the disaster zone. They on the other hand, were responsible for the incompetence shown in providing relief, for involvement in corruption related to those efforts, and for failing to prosecute the businessmen who constructed the shoddy buildings and the corrupt officials who permitted them. How voters responded to these in the 2002 parliamentary elections is investigated, using cross-provincial data, controlling for other social, political and economic factors. The fact that different groups of parties were responsible for different types of corruption and mismanagement provided us with a unique data to differentiate between voter responses to corruption and incompetence, and to corruption which has occurred before and after the earthquakes. Our results show that voters punished all of the political parties which participated in governments during the previous decade. The party in charge of the ministry responsible for disaster relief, and parties that controlled more of the city administrations in the quake zone were blamed more. The newly formed Justice and Development Party (AKP) was the main beneficiary of the votes lost by these parties. Our results corroborate the view in the corruption literature that voters react drastically only when the corruption is massive, the information on it highly-credible and well-publicized, involves large number of political parties, not accompanied by competent governance, and a non-corrupt alternative is available.

Informality has long been a salient phenomenon in developing country labor markets, thus has been addressed in several theoretical and empirical research. Turkey, given its economic and demographic dynamics, provides rich evidence for a growing, heterogeneous and multifaceted informal labor market. However, the existing evidence on labor informality in Turkey is mixed and scant. Along these lines, we aim to extend the existing literature by providing a diagnosis of dynamic worker flows across distinct labor market states and identifying the effects of certain individual and job characteristics on variant mobility patterns. More specifically, we first develop and discuss a set of probability statistics based on annual worker transitions across distinct employment states utilizing Markov transition processes. As Bosch and Maloney (2007:3) argue: “labor status mobility can be assumed as a process in which changes in the states occur randomly through time, and probabilities of moves between particular states are governed by Markov transition matrices”. Towards this end, we will use the novel Income and Living Conditions Survey (SILC) panel data set to compute the transition probabilities of individuals moving across the labor market states of formal-salaried, informal-salaried, formal self-employed, informal self-employed, unemployed and inactive. The transitions analysis is conducted separately for two, three and four year panels pertaining to 2006 to 2007, 2006 to 2008 and 2006 to 2009 transitions; for total, male and female samples; and lastly for total and non-agricultural samples. In this way, we aim to contribute to the limited body of stylized facts available on mobility and informality in the Turkish labor market. Next, we conduct multinomial logit regressions individually for each set of panel to identify the impact of individual characteristics (i.e. gender, age, education level, work experience, sector of economic activity, firm size, number of other household members, having/not having children, rural/urban) underlying worker transitions. The results reveal several relationships between the covariates and likelihood of variant transitions, and are of remarkable importance for designing policy to address labor informality and reduce its negative externalities.

This paper examines the possibility of unit roots in the presence of endogenously determined multiple structural breaks in the total, female and male labour force participation rates (LFPR) for Australia, Canada and the USA. We extend the procedure of Gil-Alana (2008) for single structural break to the case of multiple structural breaks at endogenously determined dates using the principles suggested by Bai and Perron (1998). We use the Robinson (1994) LM test to determine the fractional order of integration. We find that endogenously determined structural breaks render the total, female and male LFPR series stationary or at best mean-reverting.

This study exposes a comparative treatment of the private returns to education in Palestine and Turkey over the period 2004&2008. Comparable data, similar definitions and same methodology are used in the estimations. The estimates are provided first for average returns to education second for returns at different levels of schooling and finally for returns by different sectors of employment. The results suggest that returns to schooling are higher for Turkey at the various levels of education for Females and males and for both years 2004 and 2008. It is believed that the relative size of the Palestinian economy the uniqueness of subjugation to military occupation contribute greatly to this result. In 2008, returns are lower than 2004 levels for all levels of education; the pattern is less obvious for Turkey across the various levels. However, the 2008 crisis seems to have influenced the more educated more severely (MA and above) in both countries. Female returns to education are higher for women than men in both countries; the gender gap has worsened in 2008, but more so for Palestine. The median ratio of male to female return is 0.55 (university) in 2004 and decreased to 0.17 (high school) in 2008 in Palestine. The corresponding figures for Turkey are 0.79 and .082 (both for high school).Finally, it was found that the selectivity corrected return estimates are lower than the OLS estimates in Palestine while they are higher than the OLS estimates in Turkey.

This study examines the effects of fragmented governments and fiscal authorities on budget deficits in Turkey along with political business cycle effects. For econometric analysis we will use annual data from the period of 1960-2009. This paper sheds light on various dispersion indices and their use in the field of political power and fiscal performance. The results show that the power dispersion indices of governments and fiscal institutions significantly explain the increases in the ratio of budget deficit to GNP. The paper draws attention to the unification and better coordination of fiscal authorities in Turkey. The analysis has important policy implications for Turkey and other developing countries from the viewpoint of fragmented political and administrative dispersion of power and poor budget performances.

This paper investigates the male wage inequality and its evolution over the 1994- 2002 period in Turkey by estimating Mincerian wage equations using OLS and quantile regression techniques. Male wage inequality is high in Turkey. While it declined at the lower end of the wage distribution it increased at the top end of wage distribution. Education contributed to higher wage inequality through both within and between dimensions. The within-groups inequality increased and between-groups inequality decreased over the study period. The latter factor may have dominated the former contributing to the observed decline in the male wage inequality over the 1994-2002. Further results are provided for the wage effects of experience, public sector employment, geographic location, firm size, industry of employment and their contribution to wage inequality. Recent increases in FDI inflows, openness to trade and global technological developments are discussed as contributing factors to the recent rising within-groups wage inequality.

This study estimates a Keynesian simultaneous, dynamic macroeconometric model to investigate the impact of remittances on key macro variables such as consumption, investment, imports and income in Turkey. The estimated impact and dynamic multipliers indicate that impact of remittances on consumption, imports and income are all positive and reduce gradually while that on investment wears out in the second year. The impact multiplier for income implies a substantial increase in income due to remittances through the multiplier process. The remittances-induced output growth rate is highest during the early 1970s and the early 1980s, but negligible during the other years.

This paper examines the effects of international capital flows in a small open econ omy utilizing a dynamic general equilibrium framework based on a three-sector Ramsey growth model. In order to analyze the impact of international capital mobility on production, consumption and allocation of resources across three sectors ,two different economic environments are modelled. The first model represents an open economy with capital mobility (a more comprehensive environment),and the second model introduces a closed economy with no capital mobility. Numerical applications of the models use data from the Turkish economy for the year 2002. The numerical results demonstrate that the presence of capital mobility, despite being limited by a borrowing constraint, reverses the impact of economic growth on production and resource allocation. The results also show that while production in the closed economy model simply adjusts to domestic demand, that of the open economy model is not constrained by it. Results further point that although there is positive growth in income and output in both environments, income growth in the capital mobility environment falls short of that in the no capital mobility environment. This result can be attributed to the relatively slower accumulation of capi tal in the former, which may be compensated by a positive rate of technological progress to accompany international capital flows.

There is little evidence on unemployment duration and its determinants in developing countries. This study is on the duration aspect of unemployment in a developing country, Turkey. We analyze the determinants of the probability of leaving unemployment for employment or the hazard rate. The effects of the personal and household characteristics and the local labor market conditions are examined. The analyses are carried out for men and women separately. The results indicate that the nature of unemployment in Turkey exhibits similarities to the unemployment in both the developed and the developing countries.

The study estimates an empirical model of return intentions using a dataset compiled from an internet survey of Turkish professionals residing abroad. In the migration literature, wage differentials are often cited as an important factor explaining skilled migration. The findings of our study suggest, however, that non-pecuniary factors, such as the importance of family and social considerations, are also influential in the return or non-return decision of the highly educated. In addition, economic instability in Turkey, prior intensions to stay abroad and work experience in Turkey also increase non-return. Female respondents also appear less likely to return indicating a more selective migration process for females.

The informal sector constitutes a large share of employment and output in all developing countries. Although the informal sector is regarded by many researchers and policy makers as a source of employment developing countries desperately need, there is ample evidence that documents that informal firms are less productive, employ unskilled labor, and pay lower wages. This study analyzes the sources of productivity difference between informal and formal firms in Turkey. Since the data on the informal sector is likely to be noisy, we use two different approaches to analyze productivity differentials: firm-level analysis and individual-level analysis. In the case of firm-level analysis, we estimate and compare productivity levels of informal and formal firms by using matching propensity score and switching regression methods. In the case of individual-level data, we compare wage differentials between informal and formal wage workers by estimating a multinomial selection model. Our findings indicate that there is a significant productivity gap between informal and formal firms, and a wage gap between informal and formal workers. Moreover, the hypothesis that more educated entrepreneurs and workers move to the formal sector is supported by the data. This process of self-selection contributes to widen the productivity gap between informal and formal firms. The theories of life-cycle and learning are also supported by our findings. Older (i.e., more experienced) firms tend to operate in the formal sector. However, the relationship between informality and age is U-shaped for entrepreneurs and workers. Even after controlling for all these factors (self-selection, differences in endowments, and learning), the productivity gap does not disappear. The findings suggest that there is a substantial but untapped potential to increase productivity in Turkey. The productivity effect of operating formally is higher for services, but we may expect that a large number of informal service firms could not survive if they operate formally.

Primarily due to financial sustainability problems, social security reforms have been on the policy agenda of both developed and developing countries for the last decade. Research literature on the subject tends to use overlapping generations (OLG) models with single representative household and presents reforms as shock to the constructed model. This study presents an OLG model with three separate social security institutions where the heterogeneity is through different benefit payments and contribution rates. Convergence across various institutions is enabled by a replacement ratio shock and model dynamics are discussed.

Bu çalismada Türkiye imalat sanayiinde üretkenlik dinamikleri isyeri düzeyindeki veriler kullanilarak 1983-2001 dönemi için analiz edilmistir. Her yil yaklasik 10,000 isyerine ait detayli veriler kullanilarak ISIC (Rev. 2) 4-hane düzeyindeki sanayiler için stokastik üretim sinirlari tahmin edilmis, tahmin edilen parametreler kullanilarak isyeri düzeyinde esneklikler, ölçege göre getiri, teknolojik degisme hizi ve yönü ve teknik etkinlik düzeyi hesaplanmistir. Bu verileri kullanilarak 1983-2001 döneminde üretkenlik artislarinin bilesenleri (yapisal dönüsüm/isyerleri arasi, firma dinamikleri, isyeri içi, teknolojik degisme, ölçek ekonomileri, teknik etkinlik, girdi yogunlugu) bulunmustur. Çalismada ayrica isyeri düzeyindeki üretkenlik artisini belirleyen etkenler de analiz edilmistir.

This paper investigates how macroeconomic policy shocks in Turkey affect the total unemployment and provides evidence on the differential responses of the unemployment by sectors of economic activity. Our paper extends the previous work in two respects. First, we consider not only the response of total unemployment but also the response of unemployment by sectors of economic activity. Second, we consider not only the effect of monetary policy shocks, but also the effects of several other macroeconomic shocks. The quarterly data used which covers the period 1988:01 to 2004:04 from Turkey. A VAR model with a recursive order is employed to estimate the effects of shocks in real GDP, price, exchange rate, interbank interest rate, money supply and own sectoral unemployment on unemployment by sectors of economic activity. The results indicate that the positive income shock is followed by a decrease in unemployment in all economic activity groups during the initial periods except th e unemployment in the Electricity sector and the Community Services sector. A positive money shock decreases unemployment in sectors of Mining, Manufacturing, Construction, Wholesale-Retail Trade, Transportation and, Finance-Insurance. Opposite results are obtained with the interbank interest rate shocks. Even if, they are not statistically significant, a positive interbank interest rate shock increases the unemployment in all economic activities at the initial levels but derives down the unemployment in the Agriculture and the Community Services sectors at the initial level. Moreover, a positive price shock increases unemployment in all economic sectors in the long run except the Mining and the Community Services. Thus, unemployment in different sectors of economic activity respond differently to various macroeconomic policy shocks.

This paper first describes the educational system in Turkey an the two national examinations for advancing upper levels of schooling which give raise to the demand for private tutoring called “dersane” in Turkish. Second, the evolution of the Private tutoring Centers (PTC) are described and compared with the high schools in the country. Third, geographical distribution of the PTC, general high schools and the proportion of high school age population are compared over the provinces to give an idea about special equity issues. Other topics addressed include gender and PTC students, disruption of mainstream education, determinants of the demand for services of the PTCs, cost of PTCs and evidence on the effectiveness of PTCs.

The two major earthquakes which struck northwestern Turkey in 1999, not only caused enormous amounts of death, destruction and suffering, but also exposed rampant government corruption involving construction and zoning code violations. The incompetence shown by the government in providing relief, the corruption allegations in regards to those efforts, and government’s failure to prosecute corrupt officials and businessmen, further angered the public. How voters responded to these in the 2002 parliamentary election is investigated, using cross-provincial data, and controlling for other social, political and economic factors. Our results show that voters held accountable all of the political parties which participated in governments during the last decade or so, and not just the incumbents in 2002. The party in charge of the ministry responsible for earthquake relief, and parties that served longest and controlled more of the city administrations in the quake zone were blam ed more. The newly formed Justice and Development Party (AKP) was the beneficiary of the votes lost by these parties. The sensitivity shown by the electorate to real and perceived corruption implies that corruption problem will be tractable in Turkey, and can be reduced through increased transparency and democratization.

This paper investigates the impact of global financial conditions, US macroeconomic news and domestic macroeconomic fundamentals on the evolution of EMBI spreads for a panel of 18 emerging market (EM) countries using daily data. To this end, we employ not only the conventional panel data estimation procedures but also the recently developed common correlated effects panel mean group method which incorporates heterogeneity by allowing country-specific coefficients whilst accounting for the effects of common global shocks such as contagion. The results strongly suggest that the long-run evolution of EMBI spreads depends on external factors such as changes in global liquidity conditions, risk appetite and crises contagion. Domestic macroeconomic fundamentals proxied by sovereign country ratings are also found to be important in explaining the spreads. The results from panel equilibrium correction models suggest that EMBI spreads respond substantially also to US macroeconomic news and changes in the Federal Reserve’s target interest rates. The magnitude and the sign of the effect of US macroeconomic news, however, crucially depend on the state of the US economy, such as the presence of an inflation dominance.

The main objective of this study is to propose an analytical framework to explain the major policy shifts that has characterized post-war Turkish economic development; divided into four phases, starting respectively in 1950, 1960, 1980, and 2001. Its main contribution is to incorporate external and internal factors into this framework within a broadly political economy perspective, attaching particular significance to the role of economic crises in moving from one phase to the other. While the role of external agents is identified as the main factor behind policy shifts, the role of domestic coalitions in support of policy regime in each phase is also recognized. Drawing attention to the role of state in the impressive recent growth of countries such as China, India, and Ireland, the paper argues that there is still room for the state taking on a developmental role. The paper recommends that Turkey follows a similar path by improving state capacity not only with respect to its regulatory role but also in more developmental spheres, encompassing its redistributive and transformative role on the basis of a domestically-determined industrialization strategy.

Bu yazı, Türkiye yükseköğretim sistemine ilişkin tartışmalar çerçevesinde sistemin temel yapısal özelliklerini ana hatlarıyla değerlendirmekte ve sistemin son yılardaki hızlı genişlemesine ve karmaşık yapısına dikkat çekmektedir. Sistemin hedefleri arasındaki çelişkilere işaret edilmekte, karşılaştığı kimi temel sorunlar ana hatlarıyla incelenmekte ve çözümlerine yönelik olarak öneriler geliştirilmektedir. Sorunlar arasında, fırsat eşitsizliği, sistemin tek merkezden yönetilmesi, kendi içinde etkileşen bir akademik topluluk oluşturma güçlükleri ve araştırma gündeminin yerel anlamlılık yörüngesine oturtulamaması ön plana çıkarılmaktadır. Nicel hedeflere yönelimin nitelik üzerinde çeşitli alanlarda yarattığı olumsuz etkiler sistemin bugünkü hedeflerinin başlıca çelişkisi olarak değerlendirilmektedir. Yükseköğretim sistemini oluşturan kuruluşların hedefleri açısından farklılaştırılması, sistemin bu farklılaşma doğrultusunda ve bugünkü karmaşık yapının ortaya çıkardığı yönetim güçlükleri karşısında yeniden yapılandırılması ve fırsat eşitliğine, akademik özgürlüklere duyarlı, toplumla daha yakından ilişkili, eğitim süreçleri işgücü piyasalarıyla, araştırma gündemi toplumsal sorunlarla daha yakından ilişkilendirilmiş bir akademik ortamın oluşturulması çalışmada geliştirilen öneriler arasında yer almaktadır.

In a dynamic panel data framework, we investigate the factors influencing the export decision of the Turkish manufacturing plants over the 1990-2001 period. Our results support the presence of high sunk costs of entry to export markets, as well as the hypothesis that the full history of export participation matters for the current export decision. We further show that the effect of the past export experience on current export decision rapidly depreciates over time: Recent export market participation matters more than the participation further in the past. Finally, we show that while persistence in exporting helps lower the costs of re-entry today, there are diminishing returns to export experience. Our results are robust to plant characteristics (plant size, technology, composition of the employment), the spillovers from the presence of exporters in the same industry, as well as industry and year effects.

In this paper I test the capital accumulation conjecture that is used to rationalize return migration decisions in the context of immigrants in Germany and examine how labor market outcomes influence return migration decisions, with particular attention to selection in these outcomes in return migration. I characterize the level and timing of return migration as well as the selection in it and derive a number of implications of these on the impact of immigrants on the host as well as source countries. Using a rich longitudinal dataset that has an over-sampled group of immigrants (German Socioeconomic Panel), I conduct a Cox proportional hazard analysis with alternative waiting-time concepts. That the sample contains immigrants from four different source countries allows me to utilize the variation in the source country characteristics as well as the time variation in them to identify the parameters of interest. I find evidence for the savings accumulation conjecture, in which return is motivated by higher purchasing power of accumulated savings in the home country. On the other hand, human capital accumulation conjecture is rejected. In the framework of savings accumulation, I examine the impact of an increase in German earnings whose theoretical impact on the return migration decision is ambiguous. In terms of labor market outcomes, both retirement and unemployment emerge as important determinants of return migration choices. Unemployment spell length determines the direction of selection with respect to unemployment in return migration. The data also reveal that the level of return migration is high and varies considerably across the source countries. The hazard function of Turkish immigrants displays a hump-shaped profile that peaks between the ages of 45 and 54 whereas EU immigrants are more likely to return at earlier ages and after retirement.

The standard growth theory predicts that allowing for labor mobility across regions would increase the speed of convergence in per capita income levels and that migration has a negative causal impact on regional growth rates. Although the empirical literature has uncovered some evidence for the former implication, the latter has not been verified empirically. This paper provides empirical evidence for the negative causal impact of migration on provincial growth rates in a developing country with a high level of internal migration that is characterized by unskilled labor exiting rural areas for urban centers. We utilize instrumental variables estimation method with an instrument unique to the country examined and also control for provincial fixed effects.

The emigration of skilled individuals from Turkey attracted greater media attention and the interest of policymakers in Turkey, particularly after the experience of recurrent economic crises that have led to an increase in unemployment among the highly educated young. This study estimates a model of return intentions using a dataset compiled from an Internet survey of Turkish students residing abroad. The findings of this study indicate that, as expected, higher salaries offered in the host country and lifestyle preferences, including a more organized environment in the host country, increase the probability of student non-return. However, the analysis also points to the importance of prior return intentions and the role of the family in the decision to return to Turkey or stay overseas. It is also found that the compulsory service requirement attached to government scholarships increases the probability of student return. Turkish Student Association membership also increases return intentions. Longer stay durations, on the other hand, decrease the probability of return. These findings have important policy implications.

Recently, global warming (greenhouse effect) and its effects have become one of the hottest topics in the world agenda. There have been several international attempts to reduce the negative effects of global warming. Kyoto Protocol can be cited as the most important agreement which tries to limit the countries’ emissions within a time horizon. For this reason it becomes important to calculate the greenhouse gas emissions of countries. The aim of this study is to estimate the amount of CO2 -the most important greenhouse gas- emissions, for the Turkish economy. An extended input-output model is estimated by using 1996 data in order to identify the sources of CO2 emissions and to discuss the share of sectors in total emission. Besides ‘CO2 responsibility’, which takes into account the CO2 content of imports, is estimated for the Turkish economy. The sectoral CO2 emissions and CO2 responsibilities are compared and these two notions are linked to foreign trade volume. One of the main conclusions is that the manufacturing industry has the first place in both of the rankings for CO2 emissions and CO2 responsibilities; while agriculture and husbandry has the last place.

In this study, we analyze Turkey’s manufacturing industry trade by estimating sectoral import and export demand equations for 1980-2000. The study aims to understand whether the trade in the manufacturing industry complies with pollution haven hypothesis, and whether the free trade environment provided by the customs union (CU) agreement altered the trade pattern of the clean and dirty industries. Results of our econometric models have shown that while CU positively affects the import demand, it does not have any significant impact on the export demand of Turkish manufacturing industry. In terms of the environmental impact, distinction between clean and dirty industries turns out to be significant for both import and export demand. In general, our findings suggest that both clean and dirty industries’ import demand increase during the study period. In terms of export demand, clean industries’ export demand declines whereas dirty industries’ export demand increases compared to the total demand.

This study aims to analyze rural household work and leisure time and how it is allocated among various activities and by socio-economic characteristics of individuals. The analysis is based on a survey carried out in two central Anatolian villages. Three time use questionnaires are administered between May-October 2003 during two different days of the week, an ordinary weekday and the day of the local bazaar. 138 household members from these two villages have participated in the survey. It is found that on the average, the villagers spend over half of their non-sleeping time on non-economic activities including personal development. The remaining time spent on agricultural and non-agricultural economic activities is about the same. Males on the average spend more time on all activities than females except for personal development. The results show that, time use patterns change during different days of the week and months of the year. It is also found that, there is a high correlation between time use patterns and socio-economic characteristics of the households. In general there are statistically significant differences in the average time devoted to activities by education and age groups. Finally, significant differences are observed in the time use patterns rather than magnitudes by gender. As expected, differentiation in men’s and women’s roles is observed in agricultural activities.

This paper describes and analyses Vision 2023 Turkish National Technology Foresight Program. The paper is not about a mere description of the activities undertaken. It analyses the Program from a contextualist perspective, where the Program is considered in its own national and organizational contexts by discussing how the factors in these contexts led to the particular decisions taken and approaches adopted when the exercise was organized, designed and practiced. With the description and analysis of the Vision 2023 Technology Foresight Program, the paper suggests that each Foresight exercise should be considered in its own context. The exercise should be organized, designed and practiced by considering the effects of the external contexts (national, regional and/or corporate) and organizational factors stemming from these different context levels along with the nature of the issue being worked on, which constitute the content of the exercise.

This paper investigates the causes and balance sheet effect consequences of the liability dollarisation of non-financial sectors in Turkey using the Company Accounts database compiled by the Central Bank of Turkey. The results from the panel EGLS and GMM procedures suggest that both sector-specific (tangibility, leverage ratio, export share) and macroeconomic condition variables (inflation, real exchange rate change, budget deficits and confidence) are significant in explaining the corporate sector liability dollarisation. Firms are found to match only partially the currency composition of their debt with their income streams making them potentially vulnerable to negative balance sheet affects of real exchange rate depreciation shocks. Consistent with this argument, real exchange rate depreciations are found to be contractionary, in terms of investments and profits, for sectors with higher liability dollarisation. Macroeconomic instability, as proxied by budget deficits and inflation, appears to have a significant negative affect on the performance of the firms in the non-financial sectors, in terms of their investments, sales and profits. Our results also stress the importance of strong macroeconomic policy stance and price stability for an endogenous dedollarisation process along with regulatory measures to limit vulnerabilities caused by dollarisation.

In this paper, I develop a dynamic stochastic model of joint return migration and saving decisions that accounts for uncertainty in future employment and income and estimate this model using a longitudinal dataset on legal immigrants in Germany. The model gives a number of implications about the level, timing and selection of return migration as well as asset accumulation of immigrants according to their country of origin We also calculate the net lifetime contributions of immigrants to the pension and unemployment insurance systems of the host country. The estimated model is used to determine the impact of a number of counterfactual policy experiments on the return and savings behavior of immigrants as well as on their net contribution to the social security system. These counterfactuals include changes in the unemployment insurance program, payment of bonuses to selected groups to encourage return home, and exchange rate premiums by the source countries. In addition, I assess the impact of counterfactuals in the macroeconomic environment, like changes in wages in Germany and in purchasing power parity between Germany and the source countries.

This essay is an endeavour to understand and assess the developmental consequences of global economic integration by focussing on the generation, transfer and utilization of the global surplus. It tries to address the following questions: (1) How does globalization affect surplus generation? (2) Where does the global surplus accumulate? (3) How is the global surplus absorbed? (4) What prospects does this pattern of absorption hold for the capital accumulation needs of poor countries?

There is an excess demand for university education in Turkey. Highly competitive university entrance examination which rations the available places at university programs is very central to the lives of young people. In order to increase the chances of success of their children in the university entrance examination parents spend large sums of money on private tutoring (dersane) of their children. In this study, we investigate the factors that determine participation in private tutoring and the effect of private tutoring on getting placed at a university program. We further examine the impact of private tutoring on the scores of the applicants in the university entrance examination. The results indicate that controlling for other factors those students who receive private tutoring perform better in the university entrance examination.

Fast moving consumer goods (FMCGs) constitute a large part of consumers' budget in all countries. The retail sector for FMCGs in Turkey is in the process of a drastic transformation. New, "modern" retail formats, like chain stores and hyper/supermarkets, have rapidly diffused in almost all major urban areas, and increased their market share at the expense of traditional formats (grocery shops, green groceries, etc.) in the last couple of decades. This rapid transformation has raised concerns about competitive conditions in the sector. This study is aimed at to shed light on competitive conditions prevailing in the FMCGs retail trade sector in Turkey. We analyze how the structure of the market is being transformed in recent years by new retail formats. The study is focused on the analysis of competitive dynamics (inter-firm rivalry, pricing and non-price policies, barriers to entry, regulatory conditions, etc.) within the sector, and draws lessons for competition policy.

The aim of this article is to provide new evidence on the characteristics of Turkish professionals residing overseas and the factors that are important in their decision to return home or work abroad. With this aim, we present the results of a survey conducted in 2002, which deals with the return intentions of university-educated Turkish professionals residing abroad. The article thus presents information that will be useful to policymakers in Turkey and other developing countries with similar experiences. The findings indicate that many of the university-educated expatriates are those who stayed abroad to work after completing their studies, rather than professionals with work experience in Turkey.

The study estimates an empirical model of return intentions using a dataset compiled from an internet survey of Turkish professionals and Turkish students residing abroad. In the migration literature, wage differentials are often cited as an important factor explaining skilled migration. The findings of the study suggest, however, that other factors are also important in explaining the non-return of Turkish professionals. Economic instability in Turkey is found to be an important push factor, while work experience in Turkey also increases non-return. In the student sample, higher salaries offered in the host country and lifestyle preferences, including a more organized environment in the host country, increase the probability of not-returning. For both groups, the analysis also points to the importance of prior intentions and the role of the family in the decision to return to Turkey or stay overseas.

This paper investigates whether the Feldstein and Horioka (1980) argument on domestic saving-investment relationship is supported by the data of the countries in the Middle East and North Africa (MENA) region when the financial development levels and exchange rate regimes are taken into account. To this end, we employ both the ARDL bounds cointegration test and panel mean group procedures. The results support the view that a successful international financial integration requires compatible levels of financial intermediation. The evidence also suggests that saving-investment cointegration is not invariant to exchange rate regimes.

The paper attempts to determine whether there are significant gender differences in academic performance among undergraduate students in a large public university in Turkey based on three indicators; university entrance scores, performance in the English preparatory school and in the program the student is majoring in. The paper finds that a smaller number of female students manage to enter the university and when they do so, they enter with lower scores. However, once they are admitted to the university, they excel in their studies and outperform their male counterparts. This result holds after controlling for the field of study and individual attributes.

This paper analyzes return migration and asset accumulation in a stochastic dynamic model using a longitudinal dataset on legal immigrants in Germany. Our model gives a number of implications about the level, timing and selection of return migration along with the savings profiles of immigrants. In addition, we examine how the return and savings behavior of immigrants vary according to their country of origin and demographic characteristics. The model is used to determine the impact of a number of counterfactual policy experiments on the composition of immigrants, such as changes in the unemployment insurance program and the payment of bonuses conditional on their employment status and duration of residence to encourage immigrants to return home. In addition, we assess the impact of counterfactuals in the macroeconomic environment, like changes in wages in Germany and in purchasing power parity between Germany and the source countries.

We investigate whether the fact that most countries cannot borrow internationally in their own currencies, referred to as “original sin” by Eichengreen and Hausmann (1999), may remain as a “mystery” when an alternative variable set and estimation procedure are taken into account. Our results suggest that flexible exchange rates and strong macroeconomic policy stance with sound institutions are necessary but not sufficient for redemption from original sin. Original sin appears to be persistent and determined also by the variables which are beyond the sole control of individual countries. Consequently, redemption from it and satisfying the blessed trinity of international currency, flexible exchange rates and sound institutions requires a new international financial system allowing complete markets for all currencies meeting the necessary conditions.

This paper empirically investigates the effects of institutional and macroeconomic policy stance variables on current account deficits (CAD). Based on cross-section data for a broad number of developing and industrial countries, the results strongly suggest that better governance increases whilst the presence of original sin decreases the ability of an economy to sustain CAD. Exchange rate flexibility and openness appear to put a discipline on CAD. Consistent with the equity home bias and Feldstein-Horioka puzzle, CAD decrease with country size. The net impacts of the financial deepening and monetary credibility on CAD are found to be insignificant.

Bu çalismanin amaci kisa dönem ekonomik krizlerin sosyoekonomik etkilerini bunlardan son dönemde önemli ölçüde etkilenmis üç ülke olan Endonezya, Arjantin ve Türkiye baglaminda, bu krizlerin yayginlasmaya basladigi 1990’li yillarin baslarindan bu yana geçen süredeki gelismeler çerçevesinde incelemektir. Ayni dönemde krizle karsilasan diger ülkeleri degerlendirme disinda birakmis olsa da bu çalisma, üç ülkeyi temel alan kiyaslamali bakis açisiyla krizlerle karsilasan ülkelerin deneyimlerindeki çesitliligi ana hatlariyla ortaya koymayi amaçlamaktadir. Krizlerin nihaî etkisi, krizlerden kaynaklanan “dogrudan” etkilerin ötesinde, kriz sirasinda uygulamaya konan istikrar ve yapisal uyum programlari, krizden etkilenen kesimlerin tepkileri, uluslararasi kuruluslarin ve ülke hükümetlerinin tutumlari ve diger birçok unsurun karmasik bir bileseni olarak ortaya çikmakta ve krizlerin etkileriyle kriz sonrasi uygulanan programlarin etkilerini birbirinden ayristirabilmek güçlesmektedir. Üstelik sosyoekonomik etkilerin bir kismi kolaylikla nicellestirilemeyecek alanlari kapsamakta, nicellestirilebilecek göstergeler ise özellikle az gelismis ülkeler baglaminda mevcut istatistiksel veri bazinin en zayif oldugu alanlari kapsamaktadir. Sosyoekonomik etkilerin bütün boyutlariyla ve net bir biçimde ortaya konabilmesini güçlestiren bir diger etken, etkilerin bir ülkeden diger bir ülkeye, hatta ayni ülke içinde bir krizden bir diger krize farklililar göstermesi ve sosyoekonomik göstergelerin her zaman ayni yönde hareket etmemesidir. Bu güçlükler karsisinda, çalismada krizlerin sosyoekonomik etkilerinin belirlenmesine yönelik bir analitik çerçeve önerisi de gelistirilmektedir.

We assess the effectiveness of technology incubators in Turkey in supporting small and new firms. Information on 48 on-incubator and 41 off-incubator firms is gathered through face-to-face interviews to compare and to contrast those that benefit from incubators with those that do not. Our findings indicate differences between on- and off-incubator firms regarding their economic performance, highly in favor of on-incubator firms, but the same cannot be put forward concerning innovative output. We found financial support mechanisms and incubator support services important in explaining these performance differentials. We further argue that the impact of entrepreneur characteristics, business networking and interaction with universities are not strong enough.

Research shows an uneven partition of value added along commodity chains between transnational firms and producers in developing countries. This paper briefly discusses how such a distribution occurs and how it leads to unequal exchange in trade. A North-South trade model reveals the uneven development consequences of this exchange. The terms of trade between North and South help maintain a gap in capital accumulation between the two regions. The model reveals that capital flows covering the trade deficit of the South with the North may help stimulate the unrequited transfer of real resources from South to North.

The membership negotiations of Turkey with EU may start after satisfactory developments in the Copenhagen Criteria. Agriculture is expected to be one of the toughest areas in the accession negotiations. The difficulty will not only arise from the state of agriculture in Turkey, but also from the ever changing agricultural policy framework of EU. The structural and institutional adjustment abilities of Turkey during the pre-accession period will be the determining factors to ease the accession. The purpose of this study is to identify major elements in the pre-accession period through the description of agricultural environment in Turkey, together with the possible effects of accession on agriculture. Land and labor stem as the major divergences from the EU averages, and hence will form the basis of the accession negotiations. The next section is devoted to the structure of the basic factors of production in agriculture and to a general overview of agricultural production. The recent policy shifts and the costs and benefits of the agricultural policies are provided in the second section. The recent developments in the trade between EU and Turkey and the trade potential are presented in the third section. The last section is reserved for the concluding remarks.

Dünya nüfusunun dörtte üçlük bir kısmını oluşturan azgelişmiş ülkeler önemli bir kalkınma sorunuyla karşı karşıya bulunmaktadır. Bu soruna karşı, özellikle son elli yılda gösterilen ilgiye karşın bu ülkelerle sanayileşmiş ülkeler arasında büyük refah farklılıklarının bulunduğu, bu ülkelerde yaşayan milyonlarca insanın hâlâ yeterli beslenme, sağlık, eğitim gibi olanaklardan yoksun olduğu, işsizlik ve yoksulluk gibi sorunlarla karşı karşıya kaldığı görülmektedir. Zaman içinde evrim geçiren kalkınma kavramının bugün kendi kendine sürdürülebilen büyüme, üretim biçiminde yapısal değişme, teknolojik yenilik, sosyal, siyasal ve kurumsal yenileşme ve insanların yaşam koşullarında yaygın iyileşme gibi temel unsurlardan oluştuğu konusunda geniş bir görüş birliği bulunmaktadır. Birçok diğer alanda olduğu gibi, kalkınma sorununa ilişkin tartışmalar da son yıllarda artan ölçülerde yaygın bir küreselleşme söylemi içinde yapılmaktadır. Kalkınma kavramının aksine, küreselleşmenin yeterli bir kavramsal olgunluğa ulaştığı ve üzerinde fikir birliği oluşan bir tanımı olduğu söylenemez. Bununla birlikte, küreselleşmenin en yaygın kullanımda mal ve hizmetlerin, üretim faktörlerinin, teknolojik birikimin ve finansal kaynakların ülkeler arasında serbestçe dolaşabildiği ve faktör, mal, hizmet ve finans piyasalarının giderek bütünleştiği bir süreç anlamı taşıdığı söylenebilir. Bu alanlarda ulus devletlerin etkisinin giderek zayıflaması, buna karşılık çokuluslu şirketlerin başat bir rol üstlenmesi de küreselleşme sürecinin en temel özellikleri arasında yer almaktadır. İktisat dışındaki sosyal bilimcilerin ise küreselleşme sürecinin ?sosyal ilişkilerde ve karşılıklı bağımlılıkta dünya çapında artış gibi özelliklerini ön plana çıkardıkları görülmektedir. Küreselleşme, ortaya çıkmasındaki nedenler, temel özellikleri ve etkileri açısından da tartışmalı bir konudur. Öte yandan, günümüzdeki küreselleşme tartışmalarının bu boyutlarıyla son çeyrek yüzyılda bütün dünyada giderek yaygınlaşan neoliberal iktisat politikalarıyla ilişkilendirildiği gözlenmektedir. Neoliberal küreselleşme olarak tanımlanabilecek bu süreçte kalkınma olgusu doğrusal bir süreç olarak değerlendirilmekte ve piyasa ekonomisinin mutlak hâkimiyetiyle sonuçlanan bir ideal son?la özdeşleştirilmektedir. Bu çalışmanın amacı, neoliberal küreselleşme süreci içinde kalkınma açısından ortaya çıkan fırsat ve engelleri tartışmak, bu süreçle kalkınma arasındaki ilişkiyi bütüncül olma kaygısı taşımadan ana hatlarıyla sorgulamaktır. Neoliberal iktisat politikaları küreselleşme sürecini besleyen temel unsur olarak belirlenmekte ve bu sürecin kalkınma açısından fırsatlardan çok engeller oluşturduğu ve kalkınma amacıyla kimi temel açılardan çeliştiği sonucuna varılmaktadır.

This is the first study on private tutoring in Turkey. Private tutoring especially for the purpose of preparing for the competitive university entrance examination is an important, widespread phenomenon in Turkey. Private tutoring centers are commonly referred to as "dersane" in Turkish. This study first gives an overview of private tutoring centers. Next, it examines the determinants of private tutoring expenditures in Turkey using the results of the 1994 Household Expenditure Survey. The determinants examined within a Tobit model framework include total household expenditure, education levels of parents and other household characteristics. Such analysis of the household behavior of attempting to provide better education to their children will highlight the determinants of the demand for education and the intergenerational transfers in Turkey.

Bilindiği gibi Türkiye ekonomisi özellikle 1980´lerden bu yana hızlı bir yapısal dönüşüm süreci yaşamaktadır. Son yılların Türk iktisat yazınında farklı bakış açıları ve yöntemlerle bu sürecin nedenlerini ve sonuçlarını açıklamayı amaçlayan çalışmalara sıklıkla rastlanmaktadır. Bu çalışmanın amacı 1985-1996 dönemi için yapısal dönüşüm sürecinin ana unsurlarını belirleyebilmektir. Bu çalışmada talep yönlü girdi-çıktı (input-output) analizi temel yöntem olarak kullanılacaktır. Daha açık bir ifadeyle, üretim biçimlerindeki değişimlerin yanısıra, nihai talep unsurların sektörel üretim miktarlarındaki değişimlere olan etkileri ortaya konmaya çalışılacaktır. Böylece, yapısal değişim kaynaklarının üretim sektörleri bazında farklı etkileri irdelenebilecektir. Türkiye ekonomisi için hazırlanmış en son üç tablo olan 1985, 1990 ve 1996 yıllarına ait girdi-çıktı tabloları çalışmanın temel veri kaynaklarıdır. 1985-1996 dönemi ekonomide serbestleşme politikasının kısa dönem etkilerini gözlemlemek açısından 1985-1990 ve politikanın orta dönem etkilerini gözlemlemek açısından da 1990-1996 alt dönemlerine ayrılarak incelenecektir.

Foreign direct investment has been considered for a long time as an important channel for transfer of technology to developing countries, and an important tool to generate jobs in those countries. Multinationals bring the factor that developing countries need most, capital, and therefore, they may also help to ease the unemployment pressure created by a rapidly growing (urban) population. It is shown by many researchers that foreign establishments are much more productive than domestic firms, but the empirical evidence regarding technology spillovers is not unambiguous. In this paper, we suggest that the impact of foreign direct investment on local industry hinges on the dynamics of foreign and domestic establishments, i.e., entry, selection (exit), and growth processes. Our analysis on foreign and domestic establishments in Turkish manufacturing industry for the period 1983-96 indicates that foreign establishments have a better performance level than domestic ones when they are first established in the local market, and have a higher survival probability. However, when the establishment characteristics are controlled for, domestic establishments have the same survival probability, but achieve lower rates of employment growth in the early post-entry period.

The process of European Union Accession has provided a strong stimulus for various institutional changes in Turkey. The European Council decision taken at Helsinki (10-11 December 1999) was an important turning point in this process. The Accession Partnership, which followed the Helsinki summit, identified short and medium term priorities, intermediate objectives and conditions on which accession preparations must concentrate in the light of the political and economic criteria. One of the most important issues for Turkey regarding the adoption and implementation of the Community acquis is related with the labor market regulations and employment policies. The adoption of the Community acquis will certainly bring radical changes in the functioning of the labor market in Turkey with vital consequences for firms, and workers, as well as the long-term performance of the economy. The aim of this study is to provide information for the use of these agents on the employment and labor market issues that are important during the EU accession process. Since the topic is rather broad, the current study has concentrated upon the possible effects of the adoption of the employment acquis regulating work and employment conditions, and issues like child labor, discrimination, social protection have been ignored.

There are few studies on unemployment duration in developing countries. This is the first study on duration aspect of unemployment in Turkey. We use the results of the Household Labor Force Surveys of 2000 and 2001 to construct a cross-section of durations of unemployment spells. We analyze the determinants of probability of leaving unemployment or the hazard rate. The effects of the personal and household characteristics and the local labor market conditions are examined. Non-Parametric and parametric estimation methods are used, controlling for the unobserved heterogeneity. Two alternative definitions of unemployment are considered. The analyses are carried out for men and women separately. Our results indicate that women are experiencing higher unemployment durations then men. Age has a negative and education has a positive effect on the hazard rate. The effect of the local unemployment rate is large and negative. Duration dependence of the exit rate from unemployment is different for men and women. For men, there is slight U-shaped duration dependence, while for women there is no duration dependence.

1960'larda hızlanan sanayileşme sürecinde gelişmekte olan ülkelerin endüstriyel faaliyetlerinin sadece tekstil gibi geleneksel emek yoğun endüstriler ile sınırlı kalmayıp, aynı zamanda çelik, petrokimya, gübre, kağıt gibi yüksek oranda kirlilik yaratan ve bu ülkelerin geleneksel olarak karşılaştırmalı üstünlüğe sahip olmadıkları alanlara da kaydığı gözlenmiştir. Gelişmiş ülke tüketicilerinin temiz çevre taleplerinin artmasının ve çevreyle ilgili yasal düzenlemelerin ‘kirli endüstri’lerin (dirty industry) maliyetlerini arttırmaya başlamasının yüksek oranda kirlilik yaratan bu sektörlerin gelişmiş ülkelerdeki paylarının giderek azalmasında rol oynadığı iddia edilmektedir. Aynı zamanda gelişmekte olan ülkelerin tüketicilerinin çevre duyarlılıklarının az olması ve bu ülkelerin çevre ile ilgili yasal düzenlemelerinin gevşek olması ya da olmaması nedeniyle gelişmekte olan ülkelerin bu sektörler için doğal bir sığınak oluşturdukları iddia edilmektedir. Bu görüşe göre günümüzde ‘kirli endüstri’ler gelişmiş ülkelerden gelişmekte olan ülkelere doğru göç etmektedirler. Bu hipoteze literatürde “kirlilik sığınağı hipotezi” (pollution haven hypothesis) adı verilmektedir. Bu çalışmada öncelikli olarak Türkiye imalat sanayiindeki kirli endüstrilerin saptanması hedeflenmektedir. Bu amaçla ilk olarak imalat sanayiinin var olan kirlilik verileri kullanılarak bir seri kirlilik indeksi geliştirilmekte ve Türkiye imalat sanayiinin bu ölçütler çerçevesinde değerlendirmesi yapılarak kirli ve temiz endüstriler saptanmaktadır. Daha sonra kirli endüstrilerin toplam üretim, istihdam, ve ticaret içerisindeki payları, bu değişkenlerin tarihsel gelişimleri de göz önüne alınarak incelenmekte ve elde edilen bulguların yardımıyla Türkiye’nin bir kirlilik sığınağı olup olmadığı tartışılmaktadır.

Pollution haven hypothesis argues that the industries that are highly pollution intensive i.e. dirty industries, have been migrating from developed economies to the developing world. It is argued that the environmental concerns of the developed economies caused them to enact strict environmental regulations, which have increased the cost of production of the dirty industries at home. On the other hand, the developing countries with their low wages and lax environmental regulations have been attractive alternative producers in these sectors. At the same time this migration is also beneficial for developing countries that are in need of financial resources for industrial development. Consequently, developing countries provide pollution havens for dirty industries. In this process while the dirty industries have been migrating to the developing countries, the developed countries also have become net importers of these sectors. In this study the pollution haven argument for Turkey, for 1994-1997 period is examined. The study focuses on the pollution haven hypothesis from trade perspective by looking at the manufacturing industry data at 4-digit ISIC detail by using the panel data approach. It is found that exports increase as the dirtiness of the industries increases, providing some evidence for the pollution haven hypothesis.

Gelişmekte olan ülkelerden gelişmiş ülkelere gerçekleşen nitelikli işgücü göçü gelişmekte olan ülkeler açısından yüksek maliyetli bir hibe olarak nitelendirilebilir. Türkiye’den yurt dışına nitelikli işgücü göçü özellikle son dönemlerde peşpeşe yaşanan ekonomik krizlerden sonra daha da önem kazanmaktadır, çünkü ekonomik krizlerin ardından eğitimli gençlerde işsizlik önemli bir ölçüde artmıştır. Bu çalışma, 2002 senesinin ilk yarısında gerçekleştirilen bir anket uygulamasının sonuçlarına dayanmaktadır. Anketin hedef kitlesi yurt dışında öğrenimlerini sürdüren lisans, yüksek lisans ve doktora öğrencileri ile üniversite eğitimli işgücü olarak belirlenmiştir. Anketlerden elde edilen verilerle, çalışan profesyonellerin ve öğrencilerin Türkiye’ye geri dönme olasılıkları ve nedenleri, sıralı probit modeli ile kurgulandı ve kestirimler yapıldı. Literatürde, yüksek nitelikli işgücünün yurt dışına göç etmesinde ekonomik nedenlerin önemi vurgulanmaktadır. Yurt dışında kazanılan yüksek maaşlar, beyin göçünün en önemli nedenlerinden biri olarak görülmektedir. Çalışmamızda beklenenin aksine yurt dışında çalışanların Türkiye’ye geri dönmeme kararında yurt dışındaki yüksek gelirler istatistiksel olarak anlamlı bulunmamıştır. Öğrenci grubunda ise gelir farkları beklenildiği gibi önemli bulunmuştur. Öğrencilerin yurt dışında kalma kararındaki en önemli çekici faktör yurt dışındaki sistemli ve düzemli yaşam tarzı olmuştur. Yurt dışında çalışanların Türkiye’ye geri dönmeme kararındaki en önemli itici nedenlerden biri ise Türkiye’deki ekonomik ve siyasî istikrarsızlık olmuştur. Analizde, her iki grup için Türkiye’ye geri dönme veya yurt dışında kalma kararında gitmeden önceki dönme niyetleri ve ailenin rolü önemli çıkmıştır.

1995 Turkish parliamentary election was held almost under the conditions of a controlled experiment. The unique cross-section data pertaining to this election and the economic and political conditions surrounding it were utilized to study the relationship between the government’s economic performance and the vote shares of political parties. Turkish voters are found to be myopic, not looking back beyond the election year in assessing the government’s economic performance. A good performance is found to benefit the primary incumbent party at the expense of extremist opposition parties and a bad performance is found to benefit extremist opposition parties at the expense of the primary party in power. The junior party in a coalition government and the centrist opposition parties appear to be unaffected by the economic conditions. Evidence found is consistent with a strategic voting by the electorate, to diffuse power and/or to try parties and leaders that were not tried before or last tried a long time ago. These conclusions are essentially in conformity with the literature on other countries.

The main objective of this study is to briefly examine the process of performance evaluation in social sciences in Turkey from an international perspective and pinpoint the main difficulties and trade-offs involved in this process and suggest new ways of thinking to overcome them. Our discussion will be confined to social science research and publications by universities which in any event account for the bulk of these activities. Evaluation in social sciences can generally be conducted at the institutional, project and personal levels. While also touching upon the others, our emphasis will be on evaluation at the level of the individual researcher. We shall lean heavily on cases drawn from the field of economics and the Middle East Technical University with which we are more familiar.

This paper investigates whether the Greek data actually support the monetarist hypotheses as argued by Karfakis (2002). The results based on both ARDL and Johansen procedures consistently suggest that money and nominal income (prices) are endogenous for the parameters of the long-run evolution of velocity (real money balances). Thus, the basic postulation of monetarism, the exogeneity of money, appears not to be supported by the Greek data.

The objective of the paper is to provide a critical assessment of the emerging post-Washington Consensus (PWC), as a new paradigm in the development debate. The paper begins by tracing the main record of the Washington Consensus, the set of neoliberal economic policies propogated foremost by key Bretton Woods Institutions like the World Bank and the IMF that penetrated into the economic policy agendas of many developing countries since the late 1970s. The paper then outlines the main tenets of the PWC, emerging from the shortcomings of that record and the reaction it created in the political realm. The paper, while accepting that the PWC provides a significant improvement over the Washington Consensus, draws attention to its failure to provide a sufficiently broad framework for dealing with key and pressing development issues such as income distribution, poverty and self-sustained growth.

Since the 1980s the promotion of the formation of new firms has been considered as one of the main policies in dealing with the problem of uneven regional economic development in many countries. The determination of regional characteristics that are influential on new firm formation is quite a bit essential to develop realistic and efficient policies to solve this problem. Turkey is one of the countries with a substantial variation in new firm formation across her regions which are also significantly diversified in terms of social and economic structures. In this context, the present study explores the variation in new firm formation in manufacturing sector across regions of Turkey and investigates the effects of regional characteristics on new firm formation. Furthermore, the study provides a comparison of the differences in regional variation in underlying firm birth processes between developed countries and Turkey as a representative of a developing country. The results of the cross-section and panel data analyses show that population density is the most significant variable in explaining regional variation in new firm formation in manufacturing sector in Turkey. Such an outcome supports the urban incubator theory implying that urban context contributes to new firm formation in manufacturing in Turkey.

Bu tebliğde esas olarak istikrar programlarında mali uyumun kalitesi konusunda yanıt aramaya çalıştık. Genel teorik çerçeveden yola çıkarak mali uyumda kalite, büyümeye katkı sağlamaya yönelik maliye politikası tedbirleri ile mali uyumu sağlarken uygulanan enstrümanların kalitesi olmak üzere iki boyutta ele alınmıştır.

The paper attempts to estimate the primary surplus requirement for debt sustainability in Turkey, taking into consideration not only the operational deficit and seigniorage factors but also the exchange rate factor. In estimations, a modified version of the approach suggested by the World Bank (2000:16-18; 121-124) is used (see Appendix A for the derivation of the original formula, which is slightly different from the one in the document mentioned). The analysis is carried out in two steps. First the real interest rate is estimated and then the results are plugged into the primary surplus equation. The exchange rate factor is taken up during the estimation of the real interest rate in TL, on FX-related debt. The debt sustainability issue is evaluated by comparing the estimated primary surplus-to-GNP ratios required for debt sustainability, with the targeted primary surplus ratio, taking into consideration the real interest rate and composition of the existing debt stock.

Abstract: The purpose of the paper is to give an overview of the Turkish economy before and during the implementation of two different stabilization programs over the 2000-2002 period. Reforms undertaken and things that need to be done in both general terms and in the monetary and fiscal area are listed. The targets of the program are compared with the realizations. Success of the program is discussed in reference to developments in the main economic indicators. The most significant issue remaining concerns debt sustainability. Hence this topic is given special attention against the background of debt stock composition.

Little empirical work has been done on the relationship of job satisfaction to work environment and the managerial attitudes towards employees. Employees’ well being is important to the firm. Analysis of job satisfaction may give insight into various aspect of labor market behavior, such as worker productivity, absenteeism and job turn over. This paper investigates the relationship of worker satisfaction, to the work environment and the worker relationship to managers. We use a unique data of 28 240 British employees, Workplace Employee Relations Survey (WERS97). In this data set the employee questionnaire is matched with the employer questionnaire. Four measures of job satisfaction are negatively related to the establishment size. Establishment size in return is related to the degree of flexibility in the work environment and the relationship with the supervisors. We find that, contrary to the previous results lower levels of job satisfaction in larger establishments can not necessarily be attributed to the inflexibility in the work environment. However, the weak employee-manager relationships may be a major source of the observed lower levels of job satisfaction in larger establishments.

Recently there is a resurgence of interest in the analysis of job satisfaction variables. Job satisfaction is correlated with labor market behavior such as productivity, quits and absenteeism. Recent work examined job satisfaction in relation to various factors. In this paper four different measures of job satisfaction are related to a variety of personal and job characteristics. We use a unique data of 28 240 British employees Workplace Employee Relations Survey (WERS97). Our data set is larger and more recent than in the previous studies. The four measures of job satisfaction considered are satisfaction with influence over job, satisfaction with amount of pay, satisfaction with sense of achievement and satisfaction with respect from supervisors. Although the job satisfaction measures we use are somewhat different than those that are previously used in the literature, a number of results that are commonly obtained with international data are found to hold in our data set as well.

Abstract: The purpose of the paper is to shed light on the composition of the public sector debt stock and using the end-2002 net public debt stock-to-GNP ratio as the starting point, estimate the primary surplus-to-GNP ratio that will be necessary for the sustainability of the debt stock, using a modified version of the approach suggested by the World Bank (2000:16-18; 121-124). The relevant tables on the primary surplus-to-GNP ratio requirements are constructed under different scenarios with respect to real interest rate, growth rate and inflation rate. At the second stage, the weighted average real interest rate on the current central government debt stock is estimated. Then the debt sustainability issue is evaluated by comparing the estimated primary surplus-to-GNP ratios required with the targeted primary surplus ratio, taking into consideration the real interest rate on the existing stock

Abstract: Ikinci Dünya Savasi’ni izleyen günlerde sosyalist ülkelerle birlikte gelismekte olan ülkelerin en temel toplumsal amaçlarindan biri olarak ortaya çikan sanayilesmenin özellikle son yirmi yilda çok büyük ölçüde gündemden düstügü gözlenmektedir. Türkiye ise, daha Cumhuriyet’in kuruldugu ilk günlerden baslayarak sanayilesmeyi önemli bir hedef olarak belirlemis ve 1950’li yillarin baslarina gelindiginde hemen hemen tamami devlet öncülügünde olmak üzere kayda deger bir sanayilesme atilimi gerçeklestirmistir. Savas sonrasi dönemde bu yöndeki çabalar, Savas sirasindaki özel sermaye birikiminin de katkisiyla sürmüs ve 1960’li yillarin basinda merkezi planlamanin baslamasiyla yeni bir ivme kazanmistir. 1970’li yillarin sonlarinda artan kisa dönem istikrarsizlik ve daha önemlisi had safhaya varan dis kaynak kitligi nedeniyle sanayilesme çabalari tikanmistir. Türkiye, 1980 yili baslarindan itibaren Dünya Bankasi ve IMF desteginde serbest piyasa agirlikli disa açik politikalari esas alan neoliberal politikalari uygulayan ülkeler arasinda yer almistir. Bu süreç içinde ekonomi, hizli, sürekli ve degisken oranlarda enflasyona ve 1989 ortalarinda serbestlestirilen sermaye hareketlerine bagli olarak finansal krizler ve büyük çapli döviz kuru ve faiz oranlari dalgalanmalarinin belirledigi kisa dönem gündem içine hapsolmustur. Bunun sonucunda da yatirim, büyüme, istihdam ve gelir dagilimi gibi orta ve uzun döneme yönelik hedefler yaninda sanayilesme hedefinden de giderek uzaklasilmistir. Bu çalisma, bu kisa giristen sonra, her biri çalismanin bundan sonraki kesimlerini olusturacak üç temel amaca yöneliktir. Birinci amaç, diger iki amacimiza yönelik altyapiyi olusturabilmek için son elli yilda sanayilesmeye iliskin temel yaklasim ve bakislarindaki degisiklikleri ana hatlariyla betimlemek ve konumuz açisindan özel anlam tasiyan kimi somut sanayilesme politikalarini daha ince bir ayrinti düzeyinde incelemektir. Çalismanin ikinci amaci, Türkiye’nin sanayilesme deneyimini son yirmi yil üzerinde yogunlasarak ana hatlariyla degerlendirmek, gerçeklestirilen üretim artisinin ve yapisal degisimin boyutlarini ve baslica kirilma noktalarini belirlemek ve kisa dönem krizlerin bu süreç üzerindeki etkisini izlemektir1. Yine bu baglamda bir diger amaç, Türkiye’nin sanayilesme performansini büyüme, yatirim, istihdam, dis ticaret, teknolojik gelisme ve verimlilik gibi temel göstergeler isiginda ve yer yer benzer konumdaki ülke deneyimleriyle de iliskili olarak degerlendirmektir. Çalismanin üçüncü temel amaci, sanayilesmenin kimi olumsuz özelliklerine ve önündeki temel engellere dikkat çekmek ve bugünün kisa dönem agirlikli kisir gündeminden kurtulup vakit geçirmeksizin basta sanayilesme olmak üzere orta ve uzun dönemli amaçlara yönelme geregini vurgulamak ve sanayilesme hedefine yönelik olarak atilmasi gereken adimlar ekseninde öneriler gelistirmektir.

The study assesses the socioeconomic impact of the recent crisis in Turkey which started in the financial sector but soon made its presence felt in a wide range of other spheres. It argues that the impact of the crisis should be examined against the background of the neoliberal policies that have been in force since 1980 and the momentum of powerful structural factors most of which carried over from an even earlier period. After a brief discussion of the main conceptual and statistical difficulties confronted in assessing and isolating the impact of the crisis, the study investigates its effect in spheres such as production, employment, unemployment, wages, poverty, and income distribution and draws attention to its negative impact. To have a more complete view of its overall impact, the study also considers the response of the government, international organizations, and households to the crisis.

The J-curve hypothesis suggests a specific pattern for the response of trade balance to real exchange rate changes: a real depreciation initially worsens the trade balance, but through time the trade balance improves, and thus the response of the trade balance over time generates a tilted J shape. This study investigates the existence of a J-curve in the Turkish data in the period of 1987-2000, by using quarterly data. First an error correction model is estimated to differentiate between the long-run equilibrium and short-run dynamics. Then the response of trade balance to real exchange rate shocks are investigated by using the generalized impulse response methodology. Even though the suggested long-run pattern, which is the improvement of the trade balance in response to a real depreciation emerges, our results do not exactly support the J-curve hypothesis in the short-run. In this study we found that the short-run behavior of the trade balance in response to real exchange rate shocks show an S-pattern reminiscent of the Backus et al (1994) rather than the J-curve pattern.

This study investigates the empirical relationships between macroeconomic instability, capital accumulation and growth in Turkey over the period 1963-1999. We use recent time series econometric techniques, such as cointegration and impulse response analysis, to analyze empirical relationships between the variables of interest. The results of this paper suggest that the chronic and increasing macroeconomic instability of the Turkish economy has seriously affected her capital formation and hence her growth. Furthermore, chronic macroeconomic instability seems to become a serious impediment to the public investment, especially, its infrastructure component, and shattered or, even reversed the complementarity between public and private investment in the long-run. Therefore, Turkish experience has shown that macroeconomic instability not only deteriorates economic growth but it could also reverse the complementarity between public and private investment in the long-run.

The purpose of the study is to empirically test the presence of a bank lending channel in the Turkish economy. The empirical investigations are focused on the bank lending behaviour of 58 deposit money banks in the Turkish banking system over the period 1988-1999. The estimation methodology of the empirical analysis differs from that of similar studies in the literature, providing econometrically more efficient model estimates through exploiting dynamic panel data modelling with Generalized Method of Moments estimations. The results of the model estimations provide no evidence of a potential for a bank lending channel to exist in the Turkish economy. Such an outcome is reflected in the lack of a significant relationship between the change in the monetary policy indicator and the growth rate of the loan supply in the estimated models. Categorizing the loan supply responses of banks with respect to bank size differences has not provided any significant improvement in revealing the evidence of a bank lending channel. The empirical results indicate that bank lending behaviour is influenced significantly by bank specific factors, such as the balance sheet strength and the quality of the asset portfolio, and by debt sales to the banking system.

Abstract: Entry and exit are crucial elements of market selection process which leads to the restructuring, adaptation and evolution of an industry. While the importance of entry and exit has been recognised, attention has focused almost exclusively on quantifying barriers to them, rather than on investigating the determinants of entry and exit and measuring the magnitude of these processes. This paper analyses the entry and exit dynamics of Turkish manufacturing industry defined at the 4-digit ISIC level for the period 1981-1997. While, on the one hand, inflation targeting focuses on the determinants of entry and exit and their sectoral variation, on the other hand, inflation targeting verifies the link between entry and exit. This paper employs a dynamic panel data estimation procedure to investigate the relationship between entry and exit and to estimate the models of entry and exit. Our empirical findings suggest that rates of entry and exit are determined by profit margin, growth rate of output, concentration ratio, labor productivity, average wage rate, advertisement intensity, capital intensity and wage and productivity differentials as explanatory variables.

The present paper offers a novel study of the effects of intangible assets on wages and productivity. Training, R&D, and physical capital are all taken into account, and their joint effects examined. We use panels of firms in order to control for unobserved fixed effects and the potential endogeneity of training and R&D, and have been able to obtain data for two different countries, France and Sweden, in order to explore the effects of institutional or national specificity. The estimation of productivity and wage equations allows us to show how the benefits of investment in physical capital, R&D and training are shared between the firm and the workers. Although the workers obtain significant benefits, the study shows that the firm obtains the largest return on the investments it makes. This is true not only for physical capital and R&D, but also for training. It suggests that firms can rationally invest in training and that the issue of under-investment in training should be re-examined.

Recent studies on small and medium sized establishments emphasize the importance of networking and regional clusters for industrial development. This study is focused on an important form of cooperation between firms: subcontracting relationship. Our aim is to estimate the determinants of subcontracting in Turkish textile and engineering industries, and to derive policy implications of our estimates. We estimate subcontract offering and subcontract receiving models for both industries by using panel data on all establishments employing 25 or more workers in the period 1988-97. Our findings show that short-term/unequal relationship exists between parent firms and subcontractors in the textile industry whereas subcontracting relationships in the engineering industry are established between "similar", relatively advanced firms that have complementary assets and technologies.

Contents: I. Introduction. - II. Evolution of the Theory of International Trade: Attitudes towards the Technology Factor and the Schumpeterian Viewpoint as a Rationale for Studies at the Firm-Level. - III. A Survey of Firm-Level Studies on the Determinants of Export Performance with an Emphasis on Technology Factor. - IV. Technological and International Competitveness of the Turkish Manufacturing Industry. - V. Determinants of International Competitveness: Estimation Results. - VI. Concluding Remarks.

Twin deficit hypothesis mainly states that government budget deficits will cause trade deficits. However, this is not the only theoretically possible relationship between the budget deficit and the trade deficit. On the other extreme if Ricardian equivalence hypothesis holds it is also possible that two deficits are not related at all. In this study these hypotheses between the budget deficit and trade deficit for Turkey between 1987 - 2001 period are examined by using the cointegration methodology and by estimating an error correction model. This enabled us to search the relationship between the internal and external deficits both in the short-run and in the long-run. Our analysis showed that there is a long-run relationship between the two deficits. Also the short-run model yielded that worsening of the budget balance worsens the trade balance. Therefore we have concluded that the twin deficit hypothesis holds, and Ricardian equivalence hypothesis is not valid for Turkey during the study period.

Bazı araştırmacıların son zamanlarda belirlediği varsayıma göre kadınların işgücüne katılım oranı iktisadi kalkınma sürecinde U-biçimli bir eğri sergilemektedir. Bu makale, Türkiye'de kadınların işgücüne katılım oranlarına ilişkin zaman-serisi kanıtlarına yer veriyor ve illere göre yatay kesit belirleyicilerini ele alıyor. Zaman serisi kanıtları gösteriyor ki, sert inişli bir döneminin ardından, kadınların işgücüne katılım oranlarının düşme hızında son zamanlarda bir yavaşlama görülmektedir. Önümüzdeki birkaç on yıl içinde bu oranların çıkışa geçmesi beklenebilir. Kadınların işgücüne katılım oranlarının illere göre yatay kesit belirleyicilerinde kullanılan kalkınma ölçüsü her ilin kişi başına Gayrisafi Hasılasıdır. Kestirim modellerine, kişi başına Gayrısafi İl Hasılası'nın karesi ve başka belirleyiciler katılmıştır. Kestirim modellerinin kurulmasında 67 ilin 1980, 1985 ve 1990 zaman-konaklarına ait verileri kullanılmıştır. Elde edilen sonuçlar iktisadi kalkınmanın doğurduğu U-biçimli etkiyi doğrulamaktadır. Bunun ötesinde, kadınların işgücüne katılım oranı üzerinde işsizliğin önemli ölçüde cesaret kırıcı etkisi olurken, öğrenim durumunun büyük olumlu etkisi görülüyor. Gizli işsizlik hesaplamaları, gösteriyor ki, kentlerde kadın işsizlik oranı, olduğundan eksik hesaplanmaktadır ve ümidini yitirmiş işçi etkisi kadınlarda önemli düzeyleri bulmaktadır.

Recently, several researchers hypothesized that female labor force participation rate exhibits a U-shape during the process of economic development. This paper provides time series evidence on female labor force participation rates in Turkey and considers its cross-provincial determinants. Time series evidence shows that after a period of sharp decline the female labor force participation rates have exhibited a slowdown in the rate of decline recently. An upturn in this rate may be expected during the coming decades. In the cross-provincial determinants of female labor force participation the measure of development used is per capita Gross Provincial Product. A quadratic term in per capita Gross Provincial Product and other determinants are included in the models estimated. The models are estimated using data for 67 provinces for three time points-1980, 1985 and 1990. The results affirm the U-shaped impact of economic development. Further, unemployment had a considerable discouraging effect on female labor force participation while the impact of education was strongly positive. The hidden unemployment computations indicate that urban female unemployment rate is underestimated and the discouraged-worker effect for women is substantial.

Provisioning of the Imperial capital İstanbul had been one of the major concerns of the Ottoman rulers from the classical age to the dawn of the modern era. Grain occupied a particularly important place in the provisioning policies of the Ottoman state due to the fact that the Ottoman sultans considered the steady supply of "people's bread" in the capital city as one of the ways to promote and reproduce their image of sovereignty in the general public opinion. This consideration remained unchanged throughout the eighteenth century during which time the Ottoman economy faltered vis-à-vis the European centered world-economy and the Ottoman polity began to gradually withdraw from the economic realm. In the face of mounting fiscal burdens, the Ottoman state limited its provisioning policies to the raw materials needed by the military industries and to the basic foods consumed by the populace. In this context, the traditional protectionist attitude of the state towards the craft guilds of the imperial capital was abandoned, leaving these organizations at the mercy of circumstances not to say the market principle. The only institutions that were insulated from the changing policy of the state were the grain-related crafts, i.e. bakers' guild. This paper argues with reference to a series of published documents that the Ottoman state continued, if not hardened, its provisioning policies of grain to the imperial capital during the eighteenth century and thereafter.

The effect of privatization on labor has been one of the least addressed issues. This paper evaluates the impact of privatization on dismissed workers in Turkey. Earnings equations at state employment and after dismissal are estimated and compared to evaluate the changes in worker's welfare. Dismissed workers experienced significant earnings losses upon reemployment. Earnings losses were smaller for the self-employed than for the wage employed. Post-dismissal jobs were not only characterized by lower earnings but also by a lower quality of non-monetary attributes. The magnitude of the true welfare losses is inferred from the subjective evaluations provided by the workers themselves. Workers felt that what they had lost had not been fully compensated by the severance pay they received.

In this study, an attempt is made to compare and contrast the determinants of earnings differentials in Ankara and İstanbul. The determinants of earnings differentials are first examined with semi-logarithmic single equation models based on the basic human capital approach. Secondly, extended models are formed in which all the variables are expressed as dummy variables. In general, the average per hour earnings in İstanbul, is higher than in Ankara. It is found that age, gender, education and job status have significant effects on the explanatory power of the model, whereas occupation and marital status have only limited effect.

This paper investigates the empirical validity of the capital enhanced equilibrium exchange rates (CHEERs) model for the Turkish data. The results of the Johansen cointegration analyses for the variable system containing Turkish and US inflation rates, interest rates, and exchange rate suggest the existence of two stationary relationships explaining the long run evolution of Turkish interest rates and inflation rates, respectively. The results of the structural model obtained by data-acceptable over-identifying restrictions over the cointegration space suggest the non-rejection of the hypothesis that the first vector contains uncovered interest parity (UIP) and the second vector contains purchasing power parity (PPP) with proportionality and symmetry conditions. Consistent with the CHEERs approach, each of the international parity hypotheses is strongly rejected when formulated independently. This is a theory-consistent result for a financially open economy for which equilibrium conditions of asset and commodity markets may not be independent of each other.

This study tests the existence of political business cycles and effects of various institutional factors on budget deficits in Turkey. For this purpose, the annual (for 1960-1996), quarterly (for 1983:Q1-1997:Q2) and the monthly data (for 1990:01-1997:6) are used. Results with the annual data show that as the number of parties in a coalition government and the number of fiscal authorities increase, the budget deficits also increase while elections do not significantly affect the budget deficits. However, the coalitions, military coups, petroleum shocks, the Cyprus war and terrorism have significant and negative effects on budget deficits. Quarterly data shows that elections, number of parties in a coalition government and the number of fiscal authorities have some effects on sub items of the budget though they do not affect the budget deficit significantly. On the other hand, monthly data show that especially elections have significant and negative effects on the budget deficit and on all of the sub items of the budget except the investments. However, monthly data do not indicate any significance for the effects of number of fiscal authorities and the number of parties in the coalition governments. The analysis with monthly data of budget subtotals clearly indicate the existence of political business cycles for the period 1990-1996. Therefore, while the analyses with the annual data disguise the effects of elections, the analyses with quarterly and monthly data reveal the existence of political business cycles. Moreover, quarterly data indicate that the political power dispersion increases the transfer expenditures. We stress some policy implications of these analyses. The emphasis is on the unification of fiscal authorities, and reducing off-budget expenditures.

This study considers covered and uncovered wage earners and the self-employed. The analysis is carried out for men and women workers separately. 1994 Turkish Household Expenditure Survey is used first to examine how individuals are selected into the covered and uncovered wage earner and the self-employed categories. Next, selectivity corrected wage equations are estimated to examine wage determination in these sectors. Oaxaca-Blinder decomposition of sector of work and male-female wage differentials are carried out. When controlled for the observed characteristics and sample selection, for men, covered wage earners earn more than the uncovered wage earners and the self-employed. For the covered wage earners, men’s expected wages are about twice higher than the women’s wages. For the uncovered wage earners, men’s wages are near parity with those of women. These results suggest segmentation for men along the formal and informal lines and substantial discrimination for women in the covered private sector.

This paper gives information about public sector employment and wages in Turkey over the recent years. Central government employment, state owned enterprise employment and local administration employment are examined separately. Educational distribution of the civil servants and the state owned enterprise employees are displayed. Wages of civil servants, the state owned enterprise workers and those of in private sector are discussed. Public and private manufacturing sector wages are examined. Real personnel expenditures of the central and local governments are displayed. The share of personnel costs in the state budget and as percentage of GNP is discussed. Where possible, international comparisons are provided in all cases.

This paper investigates the long-run relationships between budget deficits, inflation and monetary growth in Turkey considering two alternative trivariate systems corresponding to the narrowest and the broadest monetary aggregates. While the joint endogeneity of money and inflation rejects the validity of the monetarist view lack of direct relationship between inflation and budget deficits makes the pure fiscal theory explanations illegitimate for the Turkish case. Consistent with the policy regime of financing domestic debt through commercial banking system budget deficits lead to a growth not of currency seigniorage but of broad money. This mode of deficit financing, leading to a creation of near money and restricting the scope for an effective monetary policy, may not be sustainable, as the government securities/braod maoney raito cannot grow without limit.

One of the main concerns of the studies dealing with competitiveness and growth accounting is productivity in manufacturing industry. However, the overall consideration of productivity on the national level leads us to ignore the fact that productivity rates may diversify among regions within a country. A comparison of productivity on regional level might provide policy-makers with the necessary information to attain efficiency in the allocation of resources among regions. This paper compares the productivity levels in manufacturing industry on the basis of 19 selected provinces in Turkey for 1994-97. The analysis is based on labor productivity, capital productivity and total factor productivity (TFP). The capital stocks of manufacturing industry at the province level were estimated to use as input in computation of TFPs. The estimations of productivity in the public and private sector were also provided for each province. Our results suggest that, contrary to the common view, productivity levels in the public sector exceed the ones in the private sector in most indicators.

The role of training and human capital accumulation as a source of innovation and growth is studied within an evolutionary micro-simulation model. Firms within the model learn about technology through radical/incremental innovation and imitation. General human capital increases the probability of innovation whereas specific human capital increases technical efficiency. Firms endogenously determine the level of investment in fixed and current assets, R&D activities, and education and training. Human capital accumulation through investment in education and training is shown to be source of economic growth even though firms tend to underinvest in these activities because they cannot fully recoup training costs when workers quit. The paper investigates the effects of various training policies on macro-performance. The first policy is to subsidise all education and training activities. The second policy requires firms to spend a certain percentage of the wage bill on training activities. In the third case, the government subsidies training activities if the firm hires unemployed people, and pays the social security contributions for one year. We experiment with these policies because many European countries adopt similar policies to cure the unemployment problem and to enhance economic growth. By running 101 experiments for each policy, increasing the parameter value step by step, we are able to test the impact of training policies on macroeconomic performance (manufacturing growth rates, unemployment, etc.), and to estimate policy elasticities through econometric techniques. The results suggest that some subsidy policies are effective in improving the long-run macro-performance while a minimum requirement to train set upon firms is not.

This paper studies the effects of human and technological capital on productivity in a sample of large French and Swedish firms. While the role of technological capital as measured by R&D has been intensively investigated, almost no work has been done on the role of human capital as measured by firm sponsored training, and even less its interaction with technological capital. The level of intangible capital may also have a lasting effect on productivity growth, as emphasised by some endogenous growth models in a macroeconomic setting. The study uses data from two panels of large French and Swedish firms for the same period (1987-93). It constructs measures of a firm’s human capital stock, based on their past and present training expenditures. The results confirm that firm sponsored training and R&D are significant inputs in the two countries, although to a different extent, and have high returns. However, except for managers and engineers in France, we do not find evidence of positive interactions between these two types of capital. Finally, growth effects at the firm level do not appear.

Diğer yatırımlarda olduğu gibi, eğitime yapılan yatırımlar da getiri oranları bakımından değerlendirilmektedir. Eğitime yatırımın toplumsal ve özel getirilerin çesitli eğitim seviyeleri, program türleri ve toplumsal cinsiyet bakımından hesaplanması, eğitim politikalarının ve reformların geliştirilmesinde izlenecek politika sorunlarına yanıt aramada önem taşır. Bu makale, eğitimin getiri oranlarına ilişkin olarak son yıllarda yapılan kestirimlerin, Türkiye ve seçilmiş ülkeler için bir taramasını sunmaktadır. Eğitimin getiri oranlarının hesaplarına göre, özellikle gelişmekte olan ülkelerde, öğrenim düzeyi yükseldilçe, toplumsal ve özel getirilerin her ikisi de azalmaktadır. Son yıllarda yapılan araştırmalar, bazı ülkelerde, örneğin Türkiye ve İspanya’da özel getirilerin öğrenim düzeyiyle arttığını göstermektedir. Birçok ülkede kadınların eğitiminin getirisi erkeklerinkinden daha yüksektir. Türkiye’de hem kadın hem de erkekler için meslek lisesi eğitiminin özel getirisi, genel liselerin özel getirisinden yüksektir. Mısır’da kadınlar için meslek programlarının getirileri, genel programlarınkinden daha azdır; fakat erkekler için tersi doğrudur. Mısır’da ve Türkiye’de çeşitli eğitim düzeylerinde, eğitimin getirisi özel sektörde kamu kesimine göre daha yüksektir.

This paper investigates whether the Feldstein and Horioka (1980) argument on domestic saving-investment relationship is supported by the French data when an endogenous structural break coresponding to a major policy regime change is taken into account. The evidence suggest that the saving-investment cointegration disappears after the estimated endogenous structural break point in 1973 coinciding with the end of the Bretton Woods System of fixed exchange rates. Consistent with a current acoount targeting policy, an investment-driven saving process appears to be the case for the fixed exchange rate regime period.

Turkey is a high inflation country but, as opposed to other countries like Argentina, Brazil and Israel where periods of high-inflation occurred, the inflation in Turkey is not hyper-inflation; in other words, it does not reach large three-digit levels annually, but remains around a figure which is, consistently, greater than fifty percent but never goes beyond a hundred percent except for a couple of months in 1994. This observation implies that inflation in Turkey may have a highly persistent nature. The question is whether this persistence is due to the inflation rate having a unit root or whether it is stationary but exhibits long-memory. Investigations of this nature have been undertaken for developed countries (Hassler and Wolter, 1995) plus high inflation countries like Argentina, Brazil and Israel (Baillie, Chung and Tieslau, 1996) plus developing countries (Baum, Barkoulas and Caglayan, 1999). The latter paper includes Turkey and investigates long-memory, via fractional integration, in CPI-based inflation using monthly series for the period 1971-1995. In our study, we depart from Baum et. al. by considering the 1987.01-2000.01 period for which the 1987-based series exist, thereby avoiding spurious jumps in the data due to splicing different series, and also by investigating WPI-based inflation for the 1987.01-2000.01 period. We first tested (using a procedure due to Vogelsang (1999)) for the presence of additive outliers (AO) in the inflation ratios and, having identified the statistically significant ones, we applied the ADF test with AO dummies included in the regression (Franses and Haldrup, 1994) and the modified Phillips-Perron test (Ng and Perron, 2000) as suggested by Vogelsang, since it is expected to be robust against AOs. The results of these first-stage investigations indicate that the presence of a unit-root cannot be established unequivocally except for the public-sector WPI based inflation rates where it was found to be absent. Given this situation, we turned to investigating long-memory in the inflation series using Autoregressive Fractionally Integrated Moving Average models and obtained values for the fractional integration parameter between 0 and 0.5, indicating that the monthly inflation rate is essentially stationary but has, in general, a significant long memory component. This value is slightly below 0.30 for CPI and public WPI based inflation rates, and close to 0.50 for overall WPI and private sector WPI based inflation rates. These results indicate that the recent, IMF-backed attempt by the government to reduce inflation has to deal with a process which, essentially, is not nonstationary but has a strong-long memory component and will exhibit a great deal of resistance initially, but if the anti-inflationary policy is successful, would yield long-lived results.

Some writers have argued that the allocation of the economic surplus in underdeveloped countries between non-essential consumption and investment is determined mainly by the distribution of the surplus among classes with different propensities for investment, and that the drain of the surplus out of underdeveloped countries is of secondary importance. This paper argues that the domestic use of the surplus is determined by the incentives and constraints of the political-economic environment that encouraging consumption and discouraging investment, and that the distribution among classes is of secondary importance. Secondly, it tries to show, with an application to Turkish data for 1980-1996, how domestic misuse of the surplus and the drain of surplus abroad can be estimated simultaneously. The surplus is estimated by subtracting essential consumption from net national product and adding the drain abroad arising from exchange rate distortion in trade.

The latest three-year stand-by agreement with the IMF that was concluded in December 1999 addresses precisely the reforming public sector in Turkey which has pervasive implications. The program can be seen as a continuation of the IMF-World Bank sponsored program of the early eighties. The main aim of the paper is to explain the conditions that led to the making of the latest stand-by agreement by setting it against the evolving role of the IMF in crisis prevention. The agreement is in fact one of the first examples of the type of program that is indicative of the new role of the Fund. The role of the US in extending a preferential political treatment for Turkey has also been instrumental in the making of the agreement. An overview of the agreement and a discussion of its broader implications for the public sector and state-society relations are also provided.

This study investigates whether the Feldstein and Horioka (1980) argument on the domestic saving-investment relationship may remain as a "puzzle" when an endogenous structural break corresponding to a major policy regime change is taken into account. To this end, we employ not only the conventional procedures developed for a data generation process without a break, but also some recent methods which allow stationarity around an endogenous break under the alternative hypothesis. The evidence based on the UK annual data from 1948 to 1998 suggests that the long-run relationship between saving and investment disappears after the estimated endogenous structural break point coinciding with the abolition of foreign exchange controls in 1979.

Provincial inequality indexes in school enrollments are computed for the years 1980 and 1994 using primary, middle and high school enrollment rates for the provinces of Turkey. Summary measures of both interprovince and intraprovince inequality are computed for the two years; the former measure is an indicator of inequality across provinces, and the latter measure is an indicator of inequality in "access to education" within provinces. The purpose is to provide a nearly fifteen-year perspective on provincial inequalities at each level of schooling and also of inequalities across the three levels of schooling in each province. Several main points are noted. First, as expected, inequality in enrollments across provinces was lowest at the primary school level since primary schooling is compulsory. Second, except at the high school level, inequality in enrollments declined between 1980 and 1994. Third, the results indicate higher female enrollment inequalities than those found for total enrollments at all levels of schooling. Fourth, the results for "convergence" models explaining interprovince changes in enrollment rates indicate convergence at the primary and middle school levels. Fifth, per capita income and degree of rurality of each province are important determinants of intraprovince inequality.

Bu çalışmanın amacı, Ankara ilinde değişik sosyo-ekonomik gruplardan bireylerin medya konusundaki tercihlerini saptamaktır. Bu makale kapsamında, seçilen bireylerin hangi gazete ve dergileri okudukları, hangi televizyon programlarını izledikleri, hangi radyo programlarını dinledikleri irdelenmekte ve bu tercihlerin, cinsiyet, yaş, eğitim ve gelir düzeyi gibi etmenlere göre ne denli farklılık gösterdiği istatistiksel olarak sınanmakta ve farklılık nedenleri incelenmektedir. Çalışma, Aralık 1998'de Ankara kentsel kesiminde yapılan anket çalışmasıyla derlenen verilere dayanmaktadır. Hazırlanan soru kağıtları, değişik sosyo-ekonomik grupları temsil edecek semtlerde 15 yaşından büyük 800 bireye uygulanmıştır. Çalışmada önce anket yapılacak semtler belirlenmiştir. Haneye ulaşma ve kabul edilme zorlukları gözönünde tutularak, anketler sinema, süpermarket, fast-food restoran gibi değişik yaş, eğitim ve gelir grubundan bireylerin bulunacağı yerlerde seçilen fertlere uygulanmıştır. Araştırmada örneğe çıkan tüm bireylerin evinde en az bir, %70'inde ise iki veya daha fazla sayıda televizyon bulunmaktadır. Televizyon seyretmeye ayrılan zaman daha çok mesai saatleri dışında, radyo, dergi ve gazete gibi diğer medya araçlarına ayrılan zaman ise daha çok mesai saatleri içindedir. Haber alma aracı olarak, daha çok televizyon kullanılmakta, bunu gazete izlemektedir. Deneklerin yarıdan fazlası medyanın yeterince özgür olmadığını düşünürken, yarısına yakını da bazı durumlarda sansürü savunmaktadır. Anketlerden çıkan ilginç sonuçlardan birisi tercih edilme ile güvenilir olma özelliklerinin adeta bağımsız olmasıdır. Fiyat ve promosyon faktörlerinin deneklerin gazete tercihlerinde, ahlaka uygunluk faktörünün ise televizyon kanalı seçimlerinde önemli rol oynamadığı gözlenmektedir.