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dc.contributor.authorTelli, C.en_US
dc.contributor.authorVoyvoda, E.en_US
dc.contributor.authorYeldan, E.en_US
dc.date.accessioned2018-04-12T13:50:29Z
dc.date.available2018-04-12T13:50:29Z
dc.date.issued2008en_US
dc.identifier.issn0269-2171
dc.identifier.urihttp://hdl.handle.net/11693/38194
dc.description.abstractThe 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.en_US
dc.language.isoEnglishen_US
dc.source.titleInternational Review of Applied Economicsen_US
dc.relation.isversionofhttp://dx.doi.org/10.1080/02692170701880767en_US
dc.subjectCentral banksen_US
dc.subjectCGEen_US
dc.subjectInflationen_US
dc.subjectTwin-targetingen_US
dc.subjectCapital flowen_US
dc.subjectComputable general equilibrium analysisen_US
dc.subjectInflationen_US
dc.subjectInterest rateen_US
dc.subjectMacroeconomicsen_US
dc.subjectEurasiaen_US
dc.subjectTurkeyen_US
dc.titleMacroeconomics of twin-targeting in Turkey: analytics of a financial computable general equilibrium modelen_US
dc.typeArticleen_US
dc.departmentDepartment of International Relations
dc.departmentDepartment of Economics
dc.citation.spage227en_US
dc.citation.epage242en_US
dc.citation.volumeNumber22en_US
dc.citation.issueNumber2en_US
dc.identifier.doi10.1080/02692170701880767en_US
dc.publisherRoutledgeen_US
dc.identifier.eissn1465-3486


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