• About
  • Policies
  • What is open access
  • Library
  • Contact
Advanced search
      View Item 
      •   BUIR Home
      • Scholarly Publications
      • Faculty of Economics, Administrative And Social Sciences
      • Department of International Relations
      • View Item
      •   BUIR Home
      • Scholarly Publications
      • Faculty of Economics, Administrative And Social Sciences
      • Department of International Relations
      • View Item
      JavaScript is disabled for your browser. Some features of this site may not work without it.

      Macroeconomics of twin-targeting in Turkey: analytics of a financial computable general equilibrium model

      Thumbnail
      View / Download
      208.2 Kb
      Author(s)
      Telli, C.
      Voyvoda, E.
      Yeldan, E.
      Date
      2008
      Source Title
      International Review of Applied Economics
      Print ISSN
      0269-2171
      Electronic ISSN
      1465-3486
      Publisher
      Routledge
      Volume
      22
      Issue
      2
      Pages
      227 - 242
      Language
      English
      Type
      Article
      Item Usage Stats
      662
      views
      196
      downloads
      Abstract
      The paper provides an overview of the post-1998 Turkish economy and constructs a macroeconomic computable general equilibrium (CGE) model to illustrate the real and financial sectoral adjustments of the Turkish economy under the conditionalities of the 'twin targets': on primary surplus to gross national product (GNP) ratio and on the inflation rate. We further utilize the model to study three sets of issues: (i) the critical role of the expanded foreign capital inflows in resolving the macroeconomic impasse between the disinflation motives of the central bank and imperatives of debt sustainability and fiscal credibility of the ministry of finance; (ii) reduction of the central bank's interest rates, and (iii) a labor market reform of reducing payroll taxes. Our simulation results suggest that the current monetary strategy, which involves a heavy reliance on foreign capital inflows along with a relatively high real rate of interest, is effective in bringing inflation down; yet it suffers from increased cost of interest burden to the public sector, and strains fiscal credibility. In contrast, given the ex ante constraints of the domestic economy in the short run, an alternative heterodox policy of reduction of the central bank interest rate and lowering of the payroll tax burden in labor markets indicate strong employment and growth effects along with strengthened fiscal credibility.
      Keywords
      Central banks
      CGE
      Inflation
      Twin-targeting
      Capital flow
      Computable general equilibrium analysis
      Inflation
      Interest rate
      Macroeconomics
      Eurasia
      Turkey
      Permalink
      http://hdl.handle.net/11693/38194
      Published Version (Please cite this version)
      http://dx.doi.org/10.1080/02692170701880767
      Collections
      • Department of Economics 697
      • Department of International Relations 558
      Show full item record

      Browse

      All of BUIRCommunities & CollectionsTitlesAuthorsAdvisorsBy Issue DateKeywordsTypeDepartmentsCoursesThis CollectionTitlesAuthorsAdvisorsBy Issue DateKeywordsTypeDepartmentsCourses

      My Account

      Login

      Statistics

      View Usage StatisticsView Google Analytics Statistics

      Bilkent University

      If you have trouble accessing this page and need to request an alternate format, contact the site administrator. Phone: (312) 290 2976
      © Bilkent University - Library IT

      Contact Us | Send Feedback | Off-Campus Access | Admin | Privacy