Browsing by Subject "Fiscal Policy"
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Item Open Access Alternatives in debt management : investigation of Turkish debt in an overlapping generations general equilibrium framework(Bilkent University, 2003) Voyvoda, EbruThe purpose of this dissertation is to investigate the fiscal policy alternatives on debt management, cohort welfare and growth for the Turkish economy. The dissertation is decomposed into two major parts. The first part outlays the issue of debt management and examines the macroeconomic effects of the current austerity program in Turkey, and illustrates the sensitivity of the program targets to growth shocks. The second part takes one step further to develop fiscal policy alternatives on debt management with emphasis on “productive expenditures” of the public sector and endogenous sources of growth. To this end, a large-scale, overlapping generations general equilibrium model with intertemporally optimizing agents and open capital markets, calibrated to the Turkish economy in 1990s, is developed. The results indicate that the current fiscal program based on the primary surplus objective succeeds in constraining the explosive dynamics of debt accumulation, yet suffers from serious trade-offs on growth and fiscal targets. The main suggestion of this study is that alternatives of fiscal programming do exist and it is important to carefully weigh the dilemmas and merits of each of these alternatives.Item Open Access Essays on macroeconomics(Bilkent University, 2018-09) Taş, Mustafa AnılThis dissertation consists of three essays on macroeconomics. The first essay models the term structure of interest rates in an international framework from a macro-finance perspective. Other essays focus on the Turkish economy. The second essay measures the potential growth rate of the Turkish economy. Finally, the third essay examines the stance of monetary policy in Turkey in the post-2001 period. In the first chapter, I develop a two-country ane term structure model that accounts for the interactions between the macroeconomic and financial variables of each country. The model features a structural preference side and reduced form macroeconomic dynamics. The economies are connected through covered interest parity. Using this framework, I provide an empirical application of the model using data from the United States and the United Kingdom. I quantify the extent to which economic dynamics in one country explain the other’s nominal term structure. I find that the variation in the bond yields in each country is explained mostly by domestic factors. The cross-country effects are more prominent in pricing of the U.S. bonds. In the second chapter, I estimate the potential growth rate of the Turkish economy using a bivariate filter. I define the potential growth as the output growth rate at which selected macroeconomic imbalance indicators do not diverge from their targets. This definition of the potential growth implies results that are substantially different than those suggested by the Hodrick-Prescott filter. I find that these imbalance indicators would not have deteriorated, had Turkey grown at much lower rates particularly after the Great Recession. I also find that for the last five years, Turkey’s potential growth rate is 3 percentage points below the trend growth rate on average. Finally, the results of this study are consistent with the growth target published in the recently announced economic plan of Turkey. The third chapter is a joint work with Refet Gürkaynak, Zeynep Kantur and Se¸cil Yıldırım-Karaman. In this chapter, we present an accessible narrative of the Turkish economy since its great 2001 crisis. We broadly survey economic developments and pay particular attention to monetary policy. The data suggests that the Central Bank of Turkey was a strong inflation targeter early in this period but began to pay less attention to inflation after 2009. Loss of the strong nominal anchor is visible in the break we estimate in Taylor-type rules as well as in asset prices. We also argue that recent discrete jumps in Turkish asset prices, especially the exchange value of the lira, are due more to domestic factors. In the post-2009 period the Central Bank was able to stabilize expectations and asset prices when it chose to do so, but this was the exception rather than the rule.Item Open Access Two essays on macroeconomics(Bilkent University, 2003) Doğan, BurakThe empirical evidence suggests that openness decreases the effect of monetary policy on output; however the effect on prices is not statistically significant. In the first chapter of this research these predictions are tested over the open economy of Turkey for quarterly data from 1987:1 to 2001:1. This chapter assesses how the openness affects the effectiveness of monetary policy on output and prices. The purpose of the second chapter is to assess if expansionary and contractionary government spending shocks have an asymmetric effect for Turkish economy. There might be asymmetry for the effect of fiscal policy on economic outcome due to stickiness of prices, perception of changes (permanent versus transitory) and nearness to full employment. This chapter assesses this asymmetry for Turkey by using quarterly data from 1987:I to 2001:I. The empirical evidence reported here reveals that private consumption and investment decrease in the face of expansionary government spending shocks; however, they either do not change or decrease very little under contractionary government spending shocks.